On July 31 2015 Myron Corporation purchased equipment

for 750 000 #8644

On July 31, 2015, Myron Corporation purchased equipment for $750,000. The equipment was
purchased with a $50,000 down payment and by borrowing a four-year, 6%, $700,000 bank
loan payable for the balance. The terms provide for the bank loan to be repaid with monthly
blended principal and interest instalment payments of $16,440 starting on August 31. Myron has
a September 30 year end.Instructions(a) Record the purchase of equipment and the receipt of
the bank loan on July 31.(b) Record the first two instalment payments, on August 31 and
September 30. Round all amounts to the nearest dollar.(c) Repeat part (b) assuming that the
terms provide for monthly fixed principal payments of $14,583, plus interest, rather than blended
payments of $16,440.View Solution:
On July 31 2015 Myron Corporation purchased equipment for 750 000

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