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What will the NBV of the equipment be

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Reference no: EM132904828

Question - On Apr 1, 2021 SOF received a bank loan of $30,000 from Conexus Credit Union. On Apr 5, 2021 SOF spent $40,000 to purchase a new point of sale systems (POS) for a total cost of $40,000. The POS system will be used to scan groceries upon the customer purchasing them. The POS system will have a 5-year useful life. The interest rate on the loan from Conexus is 7% (compounded only on the loan principle outstanding). The loan is for 3 years and will be paid back evenly over 3 years. As part of the financing SOF only needs to make the required loan payments each year on Mar 31. Each loan payment will be for $10,000 plus any interest owing.

Required -

a) Journal Entries: Prepare the required journal entries for each of the following dates relating to both the asset and the loan: Apr 1, 2021, Apr 5, 2021, Dec 31, 2021, Mar 31, 2022, Dec 31, 2022, Mar 31, 2023, Dec 31, 2023, Mar 31, 2024. You must show all supporting calculations.

b) Financial Statements: What will the NBV of the equipment be on the Dec 31, 2024 statement of financial position?

Reference no: EM132904828

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