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(Entries for Zero-Interest-Bearing Note; Payable in Installments) Sabonis Cosmetics Co. purchased machinery on December 31, 2009, paying $50,000 down and agreeing to pay the balance in four equal installments of $40,000 payable each December 31. An assumed interest of 8% is implicit in the purchase price.
Prepare the journal entries that would be recorded for the purchase and for the payments and interest on the following dates.
(a) December 31, 2009.
(b) December 31, 2010.
(c) December 31, 2011.
(d) December 31, 2012.
(e) December 31, 2013.
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