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Question: Donton Consulting performs systems consulting and also sells accounting software. Donton Consulting believes the company will need to borrow $800,000 in order to expand operations. Donton consults the bank and secures a 6?%, four?-year note on March ?1, 2017.
Donton must pay the bank principal in four equal installments plus interest annually on March 1.
1. Record the $800,000 note payable on March 1, 2017.
2. Record the entry to accrue interest due on the note at December 31?, 2017.
3. Record the entry Donton would make to record the payment to the bank on March 1, 2018.
What is the sales price variance for the two products?
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