On January 1, Kilgore Inc. accepts a $20,000 non-interest-bearing, 5-year note from Dieland Company for...
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On January 1, Kilgore Inc. accepts a $20,000 non-interest-bearing, 5-year note from Dieland Company for equipment. Neither the fair value of the note nor the equipment is determinable. Kilgore had originally purchased the equipment for $18,000, and the equipment has a book value of $14,000 on January 1. Kilgore knows Dielands incremental borrowing rate of 9%. Required: Prepare the journal entry for Kilgore to record the sale of the equipment on January 1.
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