On January 1, 2016, Crouser Company sold land to Chad Company, accepting a 2-year, $150,000, non-interest-bearing...

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On January 1, 2016, Crouser Company sold land to Chad Company, accepting a 2-year, $150,000, non-interest-bearing...

On January 1, 2016, Crouser Company sold land to Chad Company, accepting a 2-year, $150,000, non-interest-bearing note due January 1, 2018. The fair value of the land was $126,252.00 on the date of sale. Crouser purchased the land for $105,000 on January 1, 2010.

Required:

Prepare all the journal entries on Crouser’s books for January 1, 2016, through January 1, 2018, in regard to the Chad note.

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Answer 1

Answer #1

Jan-1-16	Notes receivable	150000
	Gain on sale of land		21252	=126252-105000
	Discount on notes receivable		23748
	Land		105000

Dec-31-16	Discount on notes receivable	11874		=23748/2
	Interest income		11874

Dec-31-17	Discount on notes receivable	11874
	Interest income		11874

Jan-1-18	Cash	150000
	Notes receivable		150000

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Answer 2

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