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In: Accounting

ONE Buyer Co. bought a used machine from Seller Co. on January 1, 2021, by paying...

ONE Buyer Co. bought a used machine from Seller Co. on January 1, 2021, by paying $30,000 down and giving Seller a $75,000 non-interesting bearing note due in five annual installments of $15,000 each on every December 31 starting in 2021. An assumed interest rate of 8% is implicit in the purchase price. Seller had originally paid $120,000 for the machine, and its book value at the date of sale was $85,000. Required—Prepare all note-related entries that Seller and Buyer should record in fiscal 2021.

TWO Refer to the facts above for Buyer and Seller. Required—Repeat the above requirement assuming the same facts as given except that the $75,000 note that Buyer gave Seller bears interest of 6% payable annually and is due in full on December 31, 2025.

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ekkarill92 answered 2 years ago
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