Exercise 14-17 Presented below are two independent situations: (a) On January 1, 2017, Buffalo Inc. purchased land that had an assessed value of $335,000 at the time of purchase. A $602,000, zero-interest-bearing note due January 1, 2020, 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, 2017, and the interest expense to be reported in 2017 related to this transaction. (Round answers to 0 decimal places, e.g. 38,548.)

Land to be recorded at January 1, 2017 $___________________

Interest expense to be reported $________________________

(b) On January 1, 2017, Carla Furniture Co. borrowed $4,400,000 (face value) from Gary Sinise Co., a major customer, through a zero-interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Carla Furniture agreed to sell furniture 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