Answer:
Please see the answers below:
Explanation:
1.
Debit: Equipment $912,000
Credit: Notes Payable $912,000
To record purchase of equipment at zero interest bearing note Central Michigan.
2.
Debit: Notes Payable $182,400
Debit: Interest Payable $20,064
Credit: Cash $202,464
To record Cash Payment of 1st year Installment and Interest.
3.
Debit: Notes Payable $182,400
Debit: Interest Payable $20,064
Credit: Cash $202,464
To record Cash Payment of 2nd year Installment and Interest.
4.
Debit: Depreciation Expense $91,200
Credit: Accumulated Depreciation $91,200
To record Depreciation Expense on Equipment over the life of 10 years with no salvage value. (Straight Line Depreciation is employed).
