On September 1,2020,a Company Purchased a Machine and Paid for It

question 54

Essay

On September 1,2020,a company purchased a machine and paid for it by signing a two-year noninterest-bearing note,face $4,000.The note is payable August 31,2022.The going rate of interest was 18% per year.The accounting period ends December 31.
(a)Compute the cost of the machine.
(b)Give all appropriate entries throughout the term of the note.
Use the net method.

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Definitions:

Alcohol Myopia

A cognitive condition induced by alcohol consumption, characterized by a narrowed focus of attention and impaired judgment.

Intoxicated

A state of being under the influence of substances, such as alcohol or drugs, leading to altered mood, cognition, and motor function.

Ego Depletion

A state where individuals have a diminished capacity to exert self-control or engage in cognitive tasks, due to the depletion of a limited pool of mental resources.

Impulsivity

The tendency to act on whims and desires without considering the consequences or the appropriateness of the action.