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On December 31, 2020, Metlock Company acquired a computer from Plato Corporation by issuing a...

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Accounting

On December 31, 2020, Metlock Company acquired a computer from Plato Corporation by issuing a $542,000 zero-interest-bearing note, payable in full on December 31, 2024. Metlock Companys credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $64,000 salvage value.

Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2021. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

December 31, 2021

(To record the depreciation.)

December 31, 2021

(To amortize the discount.)

Schedule of Note Discount Amortization

Date

Debit, Interest Expense Credit, Discount on Notes Payable

Carrying Amount of Note
12/31/20 $ $
12/31/21
12/31/22
12/31/23
12/31/24

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