On November 1,2010 Michigan Iron works arrange to purchase a $150,000 piece of
equipment by making a 20 percent down payment and signing a three-year installment loan contract with interest at 8 percent per year for the balance.The loan is to be repaid in semiannual installments starting on May 1,2011.
Required:
(A.)How much cash will the company pay out in 2010? Where will the cash outflows appear in the financial statements?
(B.)How much interest expense will the company incur from November 1,2010 to November 1,2011?
(C.)How much of the debt will be reduced in the first year of the note?
(D.)How will the installment note be reported on the balance sheet on December 31,2010?

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The Answer of On November 1,2010 Michigan Iron works arrange to purchase a $150,000 piece of
equipment by making a 20 percent down payment and signing a three-year installment loan contract with interest at 8 percent per year for the balance.The loan is to be repaid in semiannual installments starting on May 1,2011.
Required:
(A.)How much cash will the company pay out in 2010? Where will the cash outflows appear in the financial statements?
(B.)How much interest expense will the company incur from November 1,2010 to November 1,2011?
(C.)How much of the debt will be reduced in the first year of the note?
(D.)How will the installment note be reported on the balance sheet on December 31,2010?

On November 1,2010 Michigan Iron Works Arrange to Purchase a $150,000