A company purchased two new delivery vans for a total of $250,000 on January 1,Year 1.The company paid $40,000 cash and signed a $210,000,3-year,8% note for the remaining balance.The note is to be paid in three annual end-of-year payments of $81,487 each,with the first payment on December 31,Year 1.Each payment includes interest on the unpaid balance plus principal.
(1)Prepare a note amortization table using the format below:
(2)Prepare the journal entries to record the purchase of the vans on January 1,Year 1 and the second annual installment payment on December 31,Year 2.
Definitions:
Clayton Act
A United States antitrust law passed in 1914, aimed at promoting fair competition for the benefit of consumers by preventing unethical business practices.
Mergers
The combination of two or more companies into a single entity, typically with the aim of achieving business growth or improving competitive advantage.
Anticompetitive Behavior
Practices that unfairly restrict competition and harm consumers or other businesses.
Rule-Of-Reason Analysis
An inquiry into the competitive effects of a company’s anticompetitive behavior to determine whether the benefits of the behavior outweigh the harm.
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