Mumtaj, Inc. is acquiring equipment as follows: Krafton will pay cash of $500,000 and sign a non-interest bearing note with a face amount of $1,661,000. The fair value (i.e. market value) of equipment on 3/31/2021 is $1,500,000 The equipment will be placed in operations on the acquisition date with an expected life of 10 years. Krafton Company uses straight-line depreciation and expects no salvage value. The face amount is payable 3 years from the date of acquisition (3/31/2021). Carter Company uses a calendar year for its fiscal year. Carter Company can currently obtain loans from its banks at an interest rate of 10% Prepare an amortization table for the note payable and all necessary journal entries for the year ended 12/31/2021 including, as appropriate, adjusting entries.
Mumtaj, Inc. is acquiring equipment as follows:
Krafton will pay cash of $500,000 and sign a non-interest bearing note with a face amount of $1,661,000.
The fair value (i.e. market value) of equipment on 3/31/2021 is $1,500,000
The equipment will be placed in operations on the acquisition date with an expected life of 10 years.
Krafton Company uses straight-line depreciation and expects no salvage value.
The face amount is payable 3 years from the date of acquisition (3/31/2021). Carter Company uses a calendar year for its fiscal year. Carter Company can currently obtain loans from its banks at an interest rate of 10%
Prepare an amortization table for the note payable and all necessary
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