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Make the journal entry required by new age designs

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Reference no: EM133077258

Question - New Age Designs Inc. purchased equipment and a parcel of land on June 1, 2021. In exchange for the assets, New Age Designs issued a $996,000 3-year, non-interest-bearing note to the seller.

New Age Designs will pay the note in 3 equal instalments of $332,000 on May 31 of each year.

The appraisal values for the purchased assets are as follows:

Equipment $529,700

Land 350,400

New Age Designs normally pays an interest rate of 6% on any long-term borrowings.

New Age Design has a year end of May 31.

Required -

1. Make the journal entry required by New Age Designs for the purchase of the assets on June 1, 2021.

2. Make the journal entry required by New Age Designs for the first note payment on May 31, 2022.

3. Make the journal entry required by New Age Designs for the second note payment on May 31, 2023.

Reference no: EM133077258

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