Problemon march 1 2016 abc corp purchased parts from xyz, Ask an Expert

Accounting

Problem

On March 1, 2016, ABC Corp. purchased parts from XYZ Corp. In payment for the $64,000 purchase, ABC issued a 1-year installment note to be paid in equal monthly payments at the end of cash month. The payments include interest at the rate of 12%.

1. What entry will ABC make to record the March 1, 2016 purchase of the parts?

2. What entry will ABC make to record the 1^st installment payment on March 31, 2016?

3. How much interest expense will ABC report in its income statement for its fiscal year ended 06/30/2016?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92749976

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