On December 31, 2020, Sweet Company acquired a press from Sugar Corporation by issuing a $433,000 zero-interest-bearing note, payable in full on December 31, 2023. Sweet's credit rating permits it to borrow funds from its several lines of credit at 9%. The press is expected to have a 6-year life and a $33,000 salvage value.
Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2021. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter "0" for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2021
(To record the depreciation.)
December 31, 2021
(To amortize the discount.)
Schedule of Note Discount Amortization
Debit
Interest Expense
Credit
Discount on Notes Payable
Carrying Amount of Note
Date
12/31/20
12/31/21
12/31/22
12/31/23