Question

CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT 1. It sold land having a fair value of $909,890 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,431,725. The land is carried on Carla's books at a cost of $594,900. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $409,660 (interest payable annually). Carla 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 Carla 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 Notes Receivable 1431725 Discount on Notes Rece 521835 Land 594900 Gain on Disposal of Lan 314990 2. July 1, 2020 Notes Receivable 409660 - Discount on Notes Receiva Service Revenue

Answer 1

Date	General Journal	Debit	Credit
1-Jul-20	Note receivable	409660
	Discount on notes receivable		183154
	Service revenue		226506
	n=8, i=12% PVAF = 4.96764 Dis = (4.96764*(409660*3%))+ 409660*0.403883	226506