Reference no: EM131800408

Problem

On January 2, 2016, Evans Inc. sold used equipment to Vides Company for $3,000 down and three annual payments of $10,500, each made at December 31. Vides can borrow at 6%, Evans at 4.5%. Evans's equipment had cost $55,000 new and had a book value of $37,000 at the time of the sale.

2-1. Compute the sales price of the equipment.

2-2. Compute the amount of any gain or loss Evans had on the sale.

2-3. Record the sale by Evans.

2-4. Prepare an amortization table for Evans.

2-5. Prepare the journal entries needed for Evans at December 31, 2017.

2-6. Determine how the entry for the sale in 2016 would affect the SCF.

2-7. Determine how the entry(ies) written on 12/31/17 would affect the SCF.

2-8. Record the purchase of the equipment by Vides on 1/2/16.