Question

LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2018. In payment for the $24.5 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. & 2. Prepare the journal entry for LCD’s purchase of the components on November 1, 2018 and the first installment payment on November 30, 2018. 3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2018? Req 1 and 2Req 3 Prepare the journal entry for LCD’s purchase of the components on November 1, 2018 and the first installment payment on November 30, 2018. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the purchase of the components. Note: Enter debits before credits. Date General Journal Debit Credit November 01, 2018 Req 1 an

• Req 1 and 2
• Req 3

Prepare the journal entry for LCD’s purchase of the components on November 1, 2018 and the first installment payment on November 30, 2018. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• Req 1 and 2
• Req 3

Prepare the journal entry for LCD’s purchase of the components on November 1, 2018 and the first installment payment on November 30, 2018. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the first installment payment.

Note: Enter debits before credits.

	Date General Journal Debit Credit November 30, 2018 Journal entry worksheet Record the first installment payment. Note: Enter debits before credits. Date General Journal Debit Credit November 30, 2018

What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2018? (Enter your answer in whole dollars.)

	2018 interest expense

Answer 1

uirement1 & Journal Ent Date Account Titles and Explanation Debit Credit November 1, 2018 Component Inventory Notes payable (to record LCD's purchase of the component) 24,500,000 24,500,000 November 30, 2018 Interest expense Notes payable (2,176,795 245,000 Cash (to record payment of Instalment) 245,000 1,931,795 2,176,795 equiremen Interest expense for the year 2018 November December Total Interest expense 245,000 225,682 470,682 Total Interest expense $ 470,682