On january 1 2011 morrison inc bought some equipment by

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On January 1, 2011, Morrison, Inc. bought some equipment by signing a non-interest-bearing note for $160,000. The note is to be paid in four equal annual $40,000 payments, beginning on December 31,2011. Current interest rates were 8%. Actuarial information for 8%, 4 periods follows:

[Amount of 1] 1.360
[Present value of 1] 0.735
[Amount of annuity of 1] 4.506
[Present value of annuity of 1] 3.312

Required:Prepare the journal entries necessary on January 1, 2011, and December 31, 2011.

Reference no: EM13575693

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