On January 1, 20X1, Bodner Company agreed to buy some equipment from Adams Company. Bodner signed a note, agreeing to pay Adams $500,000 for the equipment on December 31, 20X3. The market rate of interest for this note was 10%. Required:
A. Prepare the journal entry Bodner would record on January 1, 20X1 related to his purchase.
B. Prepare the December 31, 20X1, adjusting entry to record interest expense related to the note for the first year.
C. Prepare the December 31, 20X2, adjusting entry to record interest expense related to the note for the second year.
D. Prepare the entry Bodner would record on December 31, 20X3, the due date of the note to record interest expense for the third year and payment of the note.

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The Answer of On January 1, 20X1, Bodner Company agreed to buy some equipment from Adams Company. Bodner signed a note, agreeing to pay Adams $500,000 for the equipment on December 31, 20X3. The market rate of interest for this note was 10%. Required:
A. Prepare the journal entry Bodner would record on January 1, 20X1 related to his purchase.
B. Prepare the December 31, 20X1, adjusting entry to record interest expense related to the note for the first year.
C. Prepare the December 31, 20X2, adjusting entry to record interest expense related to the note for the second year.
D. Prepare the entry Bodner would record on December 31, 20X3, the due date of the note to record interest expense for the third year and payment of the note.

On January 1, 20X1, Bodner Company Agreed to Buy Some