1-

On July 1, 2020, Bonita Inc. made two sales.

1.		It sold land having a fair value of $904,970 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,423,984. The land is carried on Bonita's books at a cost of $596,000.
2.		It rendered services in exchange for a 3%, 8-year promissory note having a face value of $409,570 (interest payable annually).

Bonita 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 Bonita Inc. for the sales transactions above that took place on July 1, 2020.

2-

Monty Family Importers sold goods to Tung Decorators for $34,800 on November 1, 2020, accepting Tungs $34,800, 6-month, 7% note. Prepare Montys November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest.

3-

Marigold Company reports the following financial information before adjustments.

		Dr.			Cr.
Accounts Receivable		$130,100
Allowance for Doubtful Accounts					$3,310
Sales Revenue (all on credit)					808,500
Sales Returns and Allowances		52,830

Prepare the journal entry to record bad debt expense assuming Marigold Company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,490 debit balance.