Durango purchased a new piece of equipment to be used in its new facility. The $

Question

Durango purchased a new piece of equipment to be used in its new facility. The $370,000 piece of equipment was purchased with a $50,000 down payment and with cash received through the issuance of a $320,000, 8%, 3-year mortgage note payable issued on October 1, 2012. The terms provide for quarterly installment payments of $30,259 on December 31, March 31, June 30, and September 30.

a) Prepare an installment payments schedule for the first five payments of the notes payable. (Round answers to 0 decimal places, e.g. 125.)

(b) Prepare the journal entry related to the notes payable for December 31, 2014. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(c) Show the balance sheet presentation for this obligation for December 31, 2014. (Hint: Be sure to distinguish between the current and long-term portions of the note.) (Round answers to 0 decimal places, e.g. 125.)

Explanation / Answer

Durango purchased a new piece of equipment to be used in its new facility. The $

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