Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 14-16 On January 1, 2017, Novak Company makes the two following acquisitions. 1. Purchases land having a fair value of $280,000 by issuing a
Exercise 14-16
On January 1, 2017, Novak Company makes the two following acquisitions.
1. | Purchases land having a fair value of $280,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $471,816. | |
2. | Purchases equipment by issuing a 6%, 8-year promissory note having a maturity value of $460,000 (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 Novak Company for the two purchases on January 1, 2017. | ||||
|
No. | Date | Account Title | Debit | Credit |
(a.) 1. | 1/1/17 | |||
2. | 1/1/17 | |||
(b.) 1. | 12/31/17 | |||
2. | 12/31/17 | |||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started