Border Company purchased a truck that cost $17,000. The company signed a $17,000 note payable that specified four equal annual payments (at each year-end), each of which includes a payment on the principal and interest on the unpaid balance at 10% per annum.
Required:
A.Calculate the amount of each equal payment (round your answer to the nearest whole dollar amount).
B.Prepare the journal entry to record the purchase of the truck.
C.Prepare the journal entry to record the first annual payment on the note (assume no interest has been accrued during the year).
D.Will the interest paid with the first annual payment be more than, or less than, the interest paid with the second annual payment? Explain your answer.

Question

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The Answer of Border Company purchased a truck that cost $17,000. The company signed a $17,000 note payable that specified four equal annual payments (at each year-end), each of which includes a payment on the principal and interest on the unpaid balance at 10% per annum.
Required:
A.Calculate the amount of each equal payment (round your answer to the nearest whole dollar amount).
B.Prepare the journal entry to record the purchase of the truck.
C.Prepare the journal entry to record the first annual payment on the note (assume no interest has been accrued during the year).
D.Will the interest paid with the first annual payment be more than, or less than, the interest paid with the second annual payment? Explain your answer.

Border Company Purchased a Truck That Cost $17,000