Question

Problem 14-08 On December 31, 2020, Teal Company acquired a computer from Plato Corporation by issuing a $591,000 zero-interest-bearing note, payable in full on December 31, 2024. Teal Company’s credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $63,000 salvage value.

Prepare the journal entry for the purchase on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2020

Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2021. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2021 (To record the depreciation.) December 31, 2021 (To amortize the discount.) Schedule of Note Discount Amortization Date Debit, Interest Expense Credit, Discount on Notes Payable Carrying Amount of Note 12/31/20 $ $ 12/31/21 12/31/22 12/31/23 12/31/24

Prepare any necessary adjusting entries relative to depreciation and amortization on December 31, 2022. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2022 (To record the depreciation.) December 31, 2022 (To amortize the discount.) Click if you would like to Show Work for this question: Open Show Work

Answer 1