Question

On January 1, 2019, Brooks, Inc., borrows $90,000 from a bank to purchase machinery. Brooks signs a 5 percent installment note requiring four annual payments of principal plus interest. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answer 1

Step-by-step explanation:

DR Machinery (asset) 90000

CR loan (liability) 9000.

machinery purchased on loan

DR instalment payable 22500

DR Interest expense 4500

CR Bank 27000

loan instalment and interest expense payment

interest calculation = 90000 × 5/100 = 4500

DR instalment payable 22500

DR Interest expense 3375

CR Bank 25875

loan instalment and interest expense payment

interest calculation = (90000 - 22500)× 5/100 = 3375

DR instalment payable 22500

DR Interest expense 2250

CR Bank 24750

loan instalment and interest expense payment

interest calculation = (90000 - 22500 - 22500)× 5/100 = 2250

DR instalment payable 22500

DR Interest expense 1125

CR Bank 23625

loan instalment and interest expense payment

interest calculation = (90000 - 22500 - 22500 - 22500)× 5/100 = 1125

Answer 2

Please see attachment

Step-by-step explanation:

The attachment necessary journal of the given information . The attachment aims to present the necessary journal entry about On January 1, 2019, Brooks, Inc., borrows $90,000 from a bank to purchase machinery. Brooks signs a 5 percent installment note requiring four annual payments of principal plus interest.