On January 1, 2018, Byner Company purchased a used tractor. Byner paid $7,000 down and signed a non interest bearing note requiring $36,000 to be paid
On January 1, 2018, Byner Company purchased a used tractor. Byner paid $7,000 down and signed a non interest—bearing note
requiring $36,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of10% properly
reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2018 and 2019 income statements for this note?
3. What is the amount of the liability the company will report in its 2018 and 2019 balance sheets for this note? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Prepare the journal entry to record the acquisition of the tractor. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest
whole dollars.) View transaction list Journal entry worksheet < 1 > Record the acquisition of the tractor.