On January 2, 2016, 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, 2020. 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. Required: Assuming that an 8% interest rate is applicable, record the journal entry for interest expense for the year ended December 31, 2016.

University car wash built a deluxe car wash across the street from campus. the new machines cost $219,000 including installation. the company estimates that the equipment will have a residual value of $19,500. university car wash also estimates it will use the machine for six years or about 12,500 total hours. actual use per year was as follows: year hours used 1 3,100 2 1,100 3 1,200 4 2,800 5 2,600 6 1,200 prepare a depreciation schedule for six years using the following methods: 1. straight-line. 2. double-declining-balance. 3. activity-based.