Chapter $14$ Homework

Question $3$ of $7$

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On January $1,2022,$ Marigold AG makes the two following acquisitions.

Purchases land having a fair value of $240,000$ by issuing a $5-$year, zero$-$interest$-$bearing promissory note in the face amount of $404,414.$

Purchases equipment by issuing a $6\%,9-$year promissory note having a maturity value of $390,000($interest payable annually$).$

The company has to pay $11\%$ interest for funds from its bank.

$($a$)$ Record the two journal entries that should be recorded by Marigold AG for the two purchases on January $1,2022.$

$($b$)$ Record the interest at the end of the first year on both notes.

$($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answer to $0$ decimal places e$.$g$.58,971.$ If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$

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