Record stay indoor journal entry for the settlement

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Question 1: On January 1, 2000, Stay Indoors Corp purchased a computer server from Remote Working Warehouse (RWW). They paid for the server by issuing RWW a $70,000 note payable which matures on December 31, 2019 (20-year term). The note pays interest at 14% and the market rate for bonds of equivalent risk is 4%. ABC also paid $8,000 (cash) to a third party for installation of the server. Record the January 1, 2000 journal entry for ABC Corp.

Question 2: Record the journal entry for Stay Indoors' interest payment on June 30, 2000 using the effective interest method.

Question 3: On July 1, 2000, Stay Indoors and RWW agreed to a settlement of the note payable. Stay Indoors paid RWW $50,000 cash and gave RWW a piece equipment in exchange for full settlement of the note. The equipment was on Stay Indoors books for $70,000 with accumulated depreciation of $60,000. RWW gave Stay Indoors $15,000 in fair value for the equipment. Record Stay Indoor's journal entry for the settlement of the note payable.

Reference no: EM132822904

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