Compute the effective interest rate on the note payable

Reference no: EM131410436

Memminger Corporation purchased equipment on January 1, 2012. The terms of the purchase required that the company pay $1,000 in interest at the end of each year for five years and $20,000 at the end of the fifth year. The FMV of the equipment on January 1, 2012, was $17,604.

REQUIRED:

a. Prepare the journal entry that would be recorded on January 1, 2012.

b. Compute the effective interest rate on the note payable.

c. Prepare the journal entry that would be recorded when the first interest payment is made on December 31, 2012.

d. Compute the net book value of the note payable as of December 31, 2012.

Reference no: EM131410436

Questions Cloud

Calculate output per hour : EC222 - Candace makes 6 pies in 3 hours; Raymond makes 40 pies in 8 hours; Vanessa makes 80 pies in a 20 hours, Sam makes 10 pies in 4 hours. Calculate their output per hour.

Determine the three most vulnerable populations : An analysis of the statistical data/trends related to the populations. How did you use data to determine the three most vulnerable populations? Explain your thought process

Select a film that deals with a moral concern : You will select a film that deals with a moral concern. You will briefly summarize this film . Then, you will analyze how the film treats this moral issue. Use the text to support your analysis . The paper should employ an APA title page, in-text c..

How the legislative process worked in this particular case : Write a response paper to address how the legislative process worked in this particular case and relate it to the concepts we have read/talked about in class

Compute the effective interest rate on the note payable : Prepare the journal entry that would be recorded when the first interest payment is made on December 31, 2012.

What changes would you make to ad to make it more successful : If you responded negatively-and you are a potential buyer of the product that was advertised- what changes would you make to the ad to make it more successful?

Assess the type of evidence offered in support of argument : write an Argument Paper that takes a position on the issue you selected. Be sure to include an explanation of the topic, possible viewpoints on the topic, your selected position on the topic, and appropriate evidence to support both your position ..

Draft an interesting and engaging essay : Writing a 1000 to 1250 words essay to include a strong thesis, and incorporate at least five scholarly sources.

Should companies involve their marketing channels in design : Should companies involve their marketing channels in the design of their customer communication programs? What are the advantages and disadvantages of doing so?

User Account

All Pages