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Record the journal entry for interest expense for the year

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Problem - On January 2, 2019, Jennings Company purchases machinery and equipment and borrows $200,000 on a 5-year non-interest-bearing note. The principal of $200,000 will be paid at the maturity date of December 31, 2023. To place a fair value on the transaction, the accountant will impute an interest rate and use that rate to compute the present value of the note. Assuming that an 8% interest rate is applicable, record the journal entry for interest expense for the year ended December 31, 2019.

Reference no: EM132888775

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