On 1st april 20x7 miller oil company purchased a pumping

Assignment Help Financial Accounting

Reference no: EM13370904

On 1^st April, 20X7, Miller Oil Company purchased a pumping truck. The sole consideration was a $100,000 note due in one year. Interest of $12,000 was added the face amount of the note. If Miller had purchased the truck for cash, the purchase price would have been only $88,000.
(a) Create the appropriate journal entry to record the purchase on 1^st April, 20X7.

(b) Create the appropriate journal entry to record the year-end discount amortization on December 31, 20X7.

(d) Evaluate what was actual rate of interest on this loan?

Reference no: EM13370904

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