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Whispering Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017,...

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Accounting

Whispering Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017, to expand its production capacity to meet customers demand for its product. Whispering issues a(n) $832,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is 11%. The company will pay off the note in five $166,400 installments due at the end of each year over the life of the note.

Collapse question part (a) Prepare the journal entry at the date of purchase. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.

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