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At January 1, 2018, Brant Cargo acquired equipment by issuing a six-year, $200,000 (payable at maturity),...

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Accounting

At January 1, 2018, Brant Cargo acquired equipment by issuing asix-year, $200,000 (payable at maturity), 5% note. The market rateof interest for notes of similar risk is 10%.

Prepare necessary journal entries:

1. On Jan 1, 2018

2. On Dec 31, 2018

3. On Dec 31, 2019

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SOLUTION Journal entries Date Accounts titles and Explanation Debit Credit Jan 1 2018 Equipment 156452 Discount on notes payable 43548 Notes payable    See Answer
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Transcribed Image Text

At January 1, 2018, Brant Cargo acquired equipment by issuing asix-year, $200,000 (payable at maturity), 5% note. The market rateof interest for notes of similar risk is 10%.Prepare necessary journal entries:1. On Jan 1, 20182. On Dec 31, 20183. On Dec 31, 2019

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