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The note payable to Royce Computers (transactions 04 and 07) is a five-year note, with interest...

The note payable to Royce Computers (transactions 04 and 07) is a five-year note, with interest at the rate of 12 percent annually. Interest expense should be computed based on a 360 day year.
June 2: Check # 5002 was used to make a down payment of $36,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $180,000.00. A five-year note was executed by Byte for the balance.
June 10: Check # 5003 was used to make a $27,500.00 payment reducing the principal owed on the June 2 purchase of computer equipment from Royce Computers.

Can someone please tell me what the journal entry for this should be? Thanks!

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Answer #1
Byte of Accounting Inc
Journal entries
No. Date Name Debit Credit Calculation
4 2-Jun Computer Equipment    180,000.00
Cash      36,000.00
Note Payable    144,000.00
7 10-Jun Note Payable      27,500.00
Cash      27,500.00
Adjusting entries
No. Date Name Debit Credit Calculation
34 30-Jun Interest expense        1,160.67 (144,000*12%*8/360)+((144,000-27,500)*12%*20/360)
Interest Payable        1,160.67
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