Specific transactions during 20x2: (continued) 5) New fitness equipment puro plu

Question

Specific transactions during 20x2: (continued) 5) New fitness equipment puro plus a non-interest bearing for the new fitness equipment. nt was purchased on July 1, 20x2. Terms of purchase: An initial cash payment note payable (refered to as "Note Payable "B") were issued in exchange (ref Initial cash payment: Maturity value of non-interest bearing note: Term of note (in number of years): Annual interest rate considered appropriate in circumstances: 44,000 366,000 4 6% DEPRECIATION of new fitness equipment: Estimated life (in number of years ) The residual value (as a percentage of original cost) is estimated at: 10%

Explanation / Answer

Cash Payment 44000 Non-interest bearing notes payable 366000 Total Cost of fitness equipment - A 410000 Estimate life - years - C 8 Residual value - B 41000 Annual depreciation (A-B)/C 46125 Amortization table Year 1 46125 Year 2 46125 Year 3 46125 Year 4 46125 Year 5 46125 Year 6 46125 Year 7 46125 Year 8 46125

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