Garcia Corporation purchased a truck by issuing an $80,000, 4-year, zero-interes
ID: 2501427 • Letter: G
Question
Garcia Corporation purchased a truck by issuing an $80,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%.
Prepare the journal entry to record the purchase of this truck. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation Debit Credit
_______________________ _____________ _______________
_______________________ ______________ _______________
_______________________ ______________ ________________
Explanation / Answer
Truck account 80000
To Purchases account 80000
[ Being truck purchased with cash]
Interest account 8000
To truck account 8000
[ being interest due]
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