On June 30, 2020, BMO Company purchased land for expansion with an assessed value of ($ 108,661)

Question:

On June 30, 2020, BMO Company purchased land for expansion with an assessed value of $\$ 108,661$ by issuing a 5-year, zero-interest-bearing note. The face value of the note is $\$ 175,000$.

Required

a. Compute the rate of interest implied by this transaction.

b. Prepare an amortization schedule for the full note term using the effective interest method.

c. Prepare the journal entries on the following dates.

1. June 30, 2020-Note issuance 2. December 31,2020 -Adjusting entry

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Intermediate Accounting Volume 2

ISBN: 9781618533135

2nd Edition

Authors: Hanlon, Hodder, Nelson, Roulstone, Dragoo

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Question Posted: May 24, 2024 09:03 AM

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On June 30, 2020, BMO Company purchased land for expansion with an assessed value of ($ 108,661)

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Intermediate Accounting Volume 2

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