Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 7-13 On July 1, 2020, Sweet Inc. made two sales. 1. It sold land having a fair value of $908,350 in exchange for a

image text in transcribed
Exercise 7-13 On July 1, 2020, Sweet Inc. made two sales. 1. It sold land having a fair value of $908,350 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,429,302. The land is carried on Sweet's books at a cost of $593,500. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $403,990 (interest payable annually). Sweet 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 Sweet Inc. for the sales transactions above that took place on July 1, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Date Account Titles and Explanation 1. July 1, 2020 2. July 1, 2020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Concepts And Applications

Authors: K. Fred Skousen, W. Steve Albrecht, James D. Stice, Earl K. Stice

7th Edition

0538876247, 978-0538876247

More Books

Students also viewed these Accounting questions