Brief Exercise 10-5 Flounder Corporation purchased a truck by issuing an $107,20

Question

Brief Exercise 10-5 Flounder Corporation purchased a truck by issuing an $107,200, 5-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 9%. 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 0 decimal places, e.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 the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

Explanation / Answer

Truck 69672 =107200*0.64993 Discount on notes payable 37528           Notes payable 107200

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