Foreman Company sells specialized machinery and equipment.On January 1,2014,the company sold equipment and received a two-year,$10,000 note with a 3 percent stated interest rate.Interest is payable each December 31,and the entire principal is payable December 31,2015.
The equipment does not have a readily established market value.The market rate of interest for notes of this type and level of risk is 10 percent.
-See Foreman Company information above.
Required:
Prepare the entries on Foreman Company's books to record the sale of the equipment.

Question

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The Answer of Foreman Company sells specialized machinery and equipment.On January 1,2014,the company sold equipment and received a two-year,$10,000 note with a 3 percent stated interest rate.Interest is payable each December 31,and the entire principal is payable December 31,2015.
The equipment does not have a readily established market value.The market rate of interest for notes of this type and level of risk is 10 percent.
-See Foreman Company information above.
Required:
Prepare the entries on Foreman Company's books to record the sale of the equipment.

Foreman Company Sells Specialized Machinery and Equipment