What is the name of the two accounts that would be credited

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On January 1, 2018, ADF, Inc. purchased a $24,000 car, making a $4,000 down payment, and borrowing the rest on a 4-year note at 8% interest. ADF agrees to make annual payments of $6,038.47, starting January 1, 2019. (You may assume that ADF borrowed directly from the car seller.)

Problem 1. The journal entry on January 1, 2018 to borrow the money and purchase the car would debit the car asset. What is the name of the two accounts that would be credited and at what amounts for each?

Problem 2. The journal entry on January 1, 2019 for the first payment on the note would include a credit to cash and what two debits in what two amounts? (Provide the name of two accounts and a dollar amount for each account.)

Reference no: EM132754808

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