Brief Exercise 10-5 Mangold Corporation purchased a truck by issuing an $112,000

Question

Brief Exercise 10-5 Mangold Corporation purchased a truck by issuing an $112,000 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10% Prepare the journal entry to record the purchase of this truck. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal the account titles and enter 0 for the amounts.) Account Titles and Explanation g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for Debit Credit Click if you would like to Show Work for this question: Open Show Work SHoW LIST OF ACCOUNTS LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 3 used SAVE FOR L ATER SUBNIT ANSWER 8

Explanation / Answer

Account titles and explanation Debit Credit Truck A/c (112000*.68301) $        76,497 Discount on notes payable (112000-76497) $        35,503 Notes payable $        112,000 (Entry for purchase of truck) PV of $1 @ 10% interest rate paid after 4 years=0.68301

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