A Company Purchased Two New Delivery Vans for a Total

question 222

Essay

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.

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Definitions:

Beta

A measure of the volatility or systematic risk of a security or a portfolio compared to the market as a whole.

Unsystematic Risk

The risk associated with a specific company or industry, which can be mitigated through diversification.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be eliminated through diversification.

Beta

Beta is a measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole, indicating its sensitivity to market movements.