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(a) On January 1, 2020, Stellar Inc, purchased land that had an assessed value of $380,000 at the time of purchase, A$515,000, zero interest-bearing note

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(a) On January 1, 2020, Stellar Inc, purchased land that had an assessed value of $380,000 at the time of purchase, A$515,000, zero interest-bearing note due January 1,2023, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%. Determine at what amount the land should be recorded at January 1, 2020, and the interest expense to be reported in 2020 related to this transaction. (Round answers to 0 decimol places, eg. 38,548 ) (b) On January 1, 2020, Pearl Furniture borrowed $5,900,000 (face valuel from Sinise Co, a major customer, through a zero-interestbearing note due in 4 years. Because the note was zero-interest-bearing. Pearl Furniture agreed to sell fumiture to this customer at lower than market price. A 10% rate of interest is normally charged on this type of loan. Prepare the journal entry to record this transaction. (Round answers to 0 decimal ploces, es. 38.548. If no entry is nequired, select "No Entry" for the occount titles and enter of for the amounts. Credit occount titles are outomatically indented when amount is entered. Do not indent manually) (b) On January 1,2020, Peed Furniture borrowed 55.900.000 (face value fromi Sinise Co-a major customer, througha zero interest: bearing note due in 4 years. Because the note was 2 ero interes-bearing. Pear Furniture agreed to sell furniture to this customer at fower than market price. A 103 s rate of litterestis normally charsed on this type of foan- Prepare the journal entry to cecord this transaction. (Round onswers to O decindf ploces es 36.548. If no entry as requilred, select No Entry for the occount bites and enter O for the dmounts. Cyedit occount tives are automatically indented when amount bentered Do not indent manusily Determine the amount of interest experse to report for 2020 . (Round answer to 0 decimal places es. 38.54Q) Interest expense to be reported for 2020 \$5

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