On January 1, 2000, a company purchased a machine that had a list price of $23,500. The purchase terms agreed upon were: cash down payment $12,000 plus a 15% note payable of $9,132 (its present value). The note is payable in three equal annual instalments (interest plus principal) on each December 31. Round to the nearest dollar. Required: (a)Give the entry to record the acquisition of the machine. (b)Give the adjusting entry required on September 30, 20x2, for interest assuming this is the end of the accounting period. I know the first entry would be: Machine 21,132 To Cash 12,000 To Note payable 9,132 However, for the second entry, I don’t know how to find out the face value of the note, if I do, I can pass an entry like: Interest Expense xxx To Interest Payable xxxx (15%*9/12*Face value) I tried finding the annuity amounts like this: 9,132 = Yearly Annuity/Payments * PVA (15%, 3 periods) which gives me $4,000 but that doesn’t help me to find out face value of the note. Can someone please help? Ty.
are u trying to get someone to solve your homework for you?