Exercise 10-15 Ayayai Corporation purchased a computer on December 31, 2016, for
ID: 2573282 • Letter: E
Question
Exercise 10-15
Ayayai Corporation purchased a computer on December 31, 2016, for $119,700, paying $34,200 down and agreeing to pay the balance in five equal installments of $17,100 payable each December 31 beginning in 2017. An assumed interest rate of 8% is implicit in the purchase price.
Date
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Date
Account Titles and Explanation
Debit
Credit
Exercise 10-15
Ayayai Corporation purchased a computer on December 31, 2016, for $119,700, paying $34,200 down and agreeing to pay the balance in five equal installments of $17,100 payable each December 31 beginning in 2017. An assumed interest rate of 8% is implicit in the purchase price.
Explanation / Answer
Dec-31-16 Equipment 104072 Discount on Notes Payable 15628 Notes Payable 85500 Cash 34200 Dec-31-17 Interest expense 5590 =(85500-15628)*8% Notes payable 11510 Discount on Notes Payable 5590 Cash 17100 Dec-31-18 Interest expense 4637 =(85500-15628-17500+5590)*8% Notes payable 12463 Discount on Notes Payable 4637 Cash 17100
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