On January 1, Year 1, Mission Company agreed to buy some equipment from Anna Company. Mission signed a non-interest-bearing note, agreeing to pay Anna $500,000 for the equipment on December 31, Year 3. The implied rate of interest for this note was 10%.
Record the journal entry for the purchase of this equipment for Mission Company on January 1, Year 1.
| Journal Entry 1 | |||||
|---|---|---|---|---|---|
| Equipment | 375,650 | ||||
| Discount | 124,350 | ||||
| Note Payable | 500,000 | ||||