Soriano Corp bought a new machine on 1/1/15, and agreed to pay for it in 5 equal installments of $40,000 on 12/31/2015 and 12/31 of each of the next four years. Assuming that the rate of 8% applies to this contract, how much should Soriano record as the cost of the machine?
B. Prepare the entry that Soriano would make to record the purchase of the machinery if the company signed a note where interest was not included in the face amount of the note.
Hi! i have a few more questions regarding this question.. I was wondering you could help me with
The first part of the problem has us write the journal entry Soriano would make to record the purchase with the interest included in the face note. DR machinery 159,708.40. DR Premium 40,291.60. CR 200,000
and to prepare the entry/entries required for the first payment.
I have.. DR Interest Expense 12,776. DR Premium 27224. CR Cash 40,000
The last part is How will Soriano's note appear on the 12/31/15 balance sheet?
would this be Note Payable of $160,000?
SO thats section A. Section B wants:
Assume that the interest is not included in the face amount of the note.
a. the cost of the machine
b. journal entry to record the purchase
c. entry/entries required for the first payment
d. presentation of the note on 12/31/15
if you could help me I would appreciate it very very much!!
Apr 30th, 2015
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