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Recording Entries for Long-Term Note Receivable; Effective-Interest Method On January 1, 2020, Jacobs Company sells land fina

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Answer #1
PV Factor PV
Interest Payment $            3,600 1.8334 $        6,600
Principal $          72,000 0.8900 $      64,080
$      70,680
Date Account Titles Debit Credit
Jan 1, 2020 Notes Receivable $         72,000
Discount on Notes Receivable $            1,320
Land $          70,680
Dec 31, 2020 Cash $           3,600
Discount on Notes Receivable $               641 =4241-3600
      Interest Revenue $            4,241 =70680*6%
Dec 31, 2021 Cash $           3,600
Discount on Notes Receivable $               679 =4279-3600
      Interest Revenue $            4,279 =(70680+641)*6%
Dec 31, 2021 Cash $         72,000
Notes Receivable $          72,000

Please do not mark thumbs down in case of rounding off error.

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