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Windsor Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2025,...

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Accounting

Windsor Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2025, to expand its production capacity to meet customersdemand for its product. Windsor issues an $1,040,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is 12%. The company pay off the note in five $208,000 installments due at the end of each year over the life of the note.

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