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Derrick Corporation Purchased Two New Delivery Vans for $85,000 on December

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Derrick Corporation purchased two new delivery vans for $85,000 on December 31,2015.Derrick paid $10,000 and signed a $75,000,5-year,12% note for the balance.The note is to be paid off in five annual payments beginning December 31,2016.Assume the installments are to consist of equal amounts of principal plus accrued interest.Prepare the journal entries to record the purchase and the second installment on December 31,2017.


Definitions:

Braxton-Hicks Contractions

The first, usually painless, contractions of childbirth.

Uterine Contractions

Involuntary muscle contractions of the uterus, which can occur during menstruation or labor.

Childbirth

The process of delivering a baby from the uterus to the outside world, which can occur through vaginal delivery or cesarean section.

Cesarean Section

A surgical procedure used to deliver a baby through incisions in the abdomen and uterus when vaginal delivery is not possible or safe.

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