Question

On July 1, 2020, Whispering Inc. made two sales. 1. It sold land having a fair value of $914,620 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,439,168. The land is carried on Whispering's books at a cost of $600,100. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $405,130 (interest payable annually). Whispering Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest. Record the two journal entries that should be recorded by Whispering Inc. for the sales transactions above that took place on July 1, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. July 1, 2020 2. July 1, 2020

Answer 1

No	Date	Account titles and explanation	Debit	Credit
1	July 1 2020	Notes Receivable	1439168
		Land		600100
		Discount on notes receivable		524528
		Gain on Disposition		314540
2	July 1 2020	Notes Receivable	405130
		Discount on notes receivable		178956.52
		Service Revenue		226173.48