View the step-by-step solution to:

Fold and Hold Corporation purchased a machine which had a current cash equivalent cost of $38,971 on January 1, 2006. Fold and Hold paid cash of...

This question was answered on Mar 24, 2010. View the Answer
Fold and Hold Corporation purchased a machine which had a current cash equivalent cost of $38,971 on January 1, 2006. Fold and Hold paid cash of $10,000 and signed an interest-bearing note for the balance, payable in six equal annual installments on each December 31 beginning with December 31, 2006. The note specified a 10% interest rate on the unpaid balance.
1.Give the entry to record the purchase on January 1, 2006 ( round to the nearest dollar)
2.Give the entry to record the first installment payment on December 31,2006 ( round to the nearest dollar)
Fold and Hold Corporation purchased a machine which had a current cash equivalent cost of $38,971 on January 1, 2006. Fold and Hold paid cash of $10,000 and signed an interest-bearing note for the balance, payable in six equal annual installments on each December 31 beginning with December 31, 2006. The note specified a 10% interest rate on the unpaid balance.
Background image of page 1

Top Answer

Dear Student, Please find answers to... View the full answer

CH240310_5787_ACC.doc

Solution:
The Payment Schedule will be as follows:
Date
Interest Accrued
Amount O/S + Interest
Cash Paid
Amount O/S
1-Jan-06
38971
10000
28971
31-Dec-06
2897
31868
6652
25216
31-Dec-07
2522
27738...

This question was asked on Mar 23, 2010 and answered on Mar 24, 2010.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • -

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards