Company purchases a business for $900k and owes only $900k to the seller which is...
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Accounting
Company purchases a business for $900k and owes only $900k to the seller which is payable over the next 3 years at $300k each year. The purchase contract does not state an interest rate so an imputed interest rate of 7% must be booked for accounting purposes per GAAP. How would the purchase transaction, interest component, and subsequent annual payments be reflected in the GL?
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