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Statewide? Energy, an electricity supply? business, is constructing substation equipment. Statewide Energy borrows ?$850 000 on 1 January 2016 specifically to finance this construction. During 2016?, it spends all of this amount and incurs interest cost of 8?% on the loan.
Requirements
Problem 1. Make the journal entry to pay Statewide? Energy's interest cost as at 31 December 2016.
Problem 2. As at 31 December 2016?, what is the balance in the Equipment? account? Prepare a? T-account for Equipment.
On January 1, 2019, Jack decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2019?
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