Information Company Purchased an Asset That Cost $70,000 on January

question 81

Essay

Information Company purchased an asset that cost $70,000 on January 1, 2014. Arrangements were made with the supplier to pay $10,000 cash on January 1, 2014, and the balance was to be paid over a three-year period, with equal annual payments of $24,553 to be made at the end of 2014, 2015, and 2016. Each payment will include principal plus interest on the unpaid balance at 11% per year.
Requirements:
B. Prepare the journal entry for the payment on December 31, 2015.
C. Explain the change, over time, on the amount of interest and the balance of the debt principal.

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Definitions:

Observable Culture

The visible and tangible aspects of an organization's culture, such as rituals, symbols, and behaviors.

Performance Orientation

A focus on outcomes and results, prioritizing performance improvement and achievement of objectives.

Encourage Innovation

The act of motivating and promoting creative thinking and the development of new ideas, products, or ways of doing something.

Organizational Culture

Organizational culture consists of the values, beliefs, behaviors, and norms that characterize an organization and shape its members' actions and interactions.