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journal entry on vehicle purchase with interest rate
How would I write a journal entry and adjusting entry for the purchase of a vehice with the following given information?
Purchase a truck for $15,000 on a 8% note truck has useful life of 7 years with no salvage value monthy payment of $400, includes principal and interest |
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The Journal Entry for the purchase of the Vehicle is: Debit Equipment for 15,000 Credit Notes Payable for 15,000 (Purchase truck with 8% Note). You should have a journal entry each month for the payment of the truck. Debit Notes Payable for the Principal Paid Debit Interest Expense for the Interest Paid Credit Cash for the whole payment of 400 The adjusting entry at the ened of the accounting period is: Debit Depreciation Expense for the amount of Depreciation Credit Accumulated Depreciation for the amount Depreciation has different methods such as Straight line, double Declining Balance and Sum of the Years Digits to name a few. You will need to know what method to use before you can figure out the Depreciation Amount. |
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