DCL Industries purchased a supply of mechanical components from E Corporation on November 1, 2009. In payment for the $48,000 purchase, DCL issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. The cost of the inventory to E Corporation was $43,000.
Borrower:
Prepare the journal entry for DCL's (Borrower) purchase of the components on November 1, 2009.
Prepare the journal entry for the first installment payment on November 30, 2009 by DCL (Borrower).
Prepare the journal entry for the second installment payment on December 31, 2009 by DCL (Borrower).