Calculate the purchase price using any of the three methods

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Sheridan Inc. decided to purchase equipment from Central Ontario Industries on January 2, 2020, to expand its production capacity to meet customers' demand for its product. Sheridan issued a $949,000, 4-year, non-interest-bearing note to Central Ontario for the new equipment when the prevailing market interest rate for obligations of this nature was 12%. The company will pay off the note in 4 $237,250 instalments due at the end of each year of the note's life.

Problem 1: Prepare the journal entry at the date of purchase. Calculate the purchase price using any of the three methods.

Reference no: EM132761653

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