What should wolfpack record as the cost of its equipment

Reference no: EM131975486

Problem

On September 1, 2016, Wolfpack, Inc. purchased equipment from another company by issuing a $6,050, 2-year, non-interest-bearing note. 10% is a reasonable cost of borrowing for non-interest-bearing notes of this nature. In addition, Wolfpack estimates that the equipment will have a five-year useful life and a residual value of $400. The company operates using a calendar year-end. What should Wolfpack record as the cost of its equipment on September 1, 2016?

Reference no: EM131975486

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