On September 30 2014 Coldwater Corporation purchased

equipment for 1 1 #8636

On September 30, 2014, Coldwater Corporation purchased equipment for $1.1 million. The
equipment was purchased with a $100,000 down payment and a three-year, 8%, $1-million
bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed
principal payments of $83,333, plus interest, starting on December 31.Coldwater has a
November 30 year end and records adjusting entries annually.Instructions(a) Record the
purchase of equipment on September 30, 2014.(b) Record the accrual of interest expense on
November 30, 2014. Round to the nearest dollar.(c) Record the first two instalment payments,
on December 31, 2014, and March 31, 2015. Round all amounts to the nearest dollar.(d)
Repeat part (b) and (c) assuming that the terms provide for quarterly blended principal and
interest payments of $94,560, rather than fixed principal payments of $83,333, plus
interest.View Solution:
On September 30 2014 Coldwater Corporation purchased equipment for 1 1

ANSWER
http://paperinstant.com/downloads/on-september-30-2014-coldwater-corporation-purchased-
equipment-for-1-1/

1/1
Powered by TCPDF (www.tcpdf.org)