Determination of cost on august 2, 2010, Smith Corp purchased a new machine on a deferred payment basis. They made a down payment of $1,000 and will make four monthly installments of $2,500 each beginning on September 1, 2010. The cahs equivalent price of the machine was $9,500. Smith Corp incurred and paid installation costs of $300.
Prepare the journal entries to record the acquisition of the machine.