On January 1, 2007 Lisa Company sold machinery with a book value of $118,000 to Mark Company.

Question:

On January 1, 2007 Lisa Company sold machinery with a book value of $118,000 to Mark Company. Mark Company signed a $180,000 non-interest-bearing note, payable in three $60,000 annual installments on December 31, 2007, 2008, and 2009. The fair value of the machinery was $149,211.12 on the date of sale. The machinery had been purchased by Lisa Company at a cost of $160,000.

Required

1. Prepare all the journal entries on Lisa Company’s books for January 1, 2007 through December 31, 2009.

2. Prepare the notes receivable portion of the Lisa Company’s balance sheet on December 31, 2007 and 2008.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...