On May 1,2012,Sea Escape Ltd

question 5

Essay

On May 1,2012,Sea Escape Ltd.purchases a new automobile for $18,000 from the dealer who provides the financing.The three-year,interest-free loan is repayable at $500 per month.The market rate of interest for similar transactions is 0.25% per month.
Requirement:
Prepare journal entries to record:
a.the purchase of the automobile.
b.the accrual of interest and the loan payment at the end of May 2012.

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Definitions:

Domestic Violence

A pattern of abusive behavior in any relationship that is used by one partner to gain or maintain control over another intimate partner.

Abusive Spouse

An individual in a marital or intimate relationship who uses physical, emotional, sexual, or psychological means to exert power and control over their partner.

Annual Exam

A yearly medical check-up to assess health status, screen for diseases, and discuss preventative care strategies.

Menstrual Period

A monthly cycle in individuals with a uterus where the lining of the uterus is shed if pregnancy does not occur, typically resulting in bleeding.