Johnson inc purchased equipment at 1114 and struck a deal

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Reference no: EM13570343

Johnson Inc. purchased equipment at 1/1/14 and struck a deal as follows: $10,000 in cash down, followed by $20,000 payments at 12/31 for 4 years. Johnson can borrow at 6%, its seller can borrow at 4%.

1. Determine the cash equivalent price for the equipment.

2. Record the purchase of the equipment.

3. Prepare an amortization table for the note.

4. Write any necessary entries for the end of the third year.

5. How much total interest will Johnson Inc. pay?

Reference no: EM13570343

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