Soldan Corporation purchased a computer on December 31,2011, paying 30,000 down and a further payment due on December 31,2014.An interest rate of 10% is implicit in the purchase price. Soldan uses the Effective method and has December the 31 as year end.
1. Prepare the journal entries at the date of purhase
2.Prepare the journal entries at the end of the first year to record the payment and interest, assuming that the company uses effective method.
3.Record the journal entries at the second year to record the payment and interest.