On January 1,2014,Nonsuch Corporation sold specialized equipment originally costing $20,000 and having a book value of $16,000.The market value of the equipment was not readily determinable.
Nonsuch received a $5,000 downpayment and a $10,000,4 percent note payable in four equal annual installments beginning December 31,2014.The current market rate on notes of a similar nature and risk is 10 percent.
Required:
Prepare the entries to record the sale of the equipment on January 1,2014,and the first interest payment received on December 31,2014.

Question

Quizplus · Accepted Answer

The Answer of On January 1,2014,Nonsuch Corporation sold specialized equipment originally costing $20,000 and having a book value of $16,000.The market value of the equipment was not readily determinable.
Nonsuch received a $5,000 downpayment and a $10,000,4 percent note payable in four equal annual installments beginning December 31,2014.The current market rate on notes of a similar nature and risk is 10 percent.
Required:
Prepare the entries to record the sale of the equipment on January 1,2014,and the first interest payment received on December 31,2014.

On January 1,2014,Nonsuch Corporation Sold Specialized Equipment Originally Costing $20,000