New fitness equipment was purchased on July 1, 20x2. Terms of purchase
Initial cash payment $40,000
A 5 year non-interest bearing note $450,000
Annual interest rate considered appropriate 6%
The new fitness equipment has an estimated life of 8 years; the estimated residual value is 15% of original cost.
Record the purchase of fitness equipment on July 1, 20x2
Record the depreciation on fitness equipment
Show all work and amortization schedule