On January $1,2023,$ Riverbed Corporation acquired the following properties:

Investment property consisting of land and an apartment building in Toronto for $$1\mathrm{.}50$ million. To finance this transaction,

Riverbed issued a five$-$year interest$-$free promissory note to repay $$2,307,941$ on January $1,2028.$

Vacant land in Rome, Italy, for $$3\mathrm{.}4$ million. To finance this transaction, Riverbed obtained a $7\%$ mortgage for the full purchase

price, secured by the land, with a maturity date of January $1,2033.$ Interest is payable annually. If Riverbed borrowed this

money from the bank, the company would need to pay $9\%$ interest.

factor table PRESENT VALUE OF $1.$

table PRESENT VALUE OF AN ANNUITY OF $1.$

$($a$)$

Your answer is correct.

Using $(1)$ factor tables, $(2)$ a financial calculator, or $(3)$ Excel function PV$,$ calculate the value of the mortgage. Using the calculation

from the tables, record Riverbed's journal entries on January $1,2023,$ for each of the purchases. $($Hint: Refer to Chapter $3$ for tips

on calculating.$)($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $0$ decimal places e$.$g$.$

$58,971.$ Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select

$"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credit

Jan. $1$

$2023$

Investment Property

Notes Payable

$($To record purchase of land and building$)$

Jan. $1$

$2023$

Land

Mortgage Payable

$($To record purchase of land$)($b$)$

Your answer is partially correct.

Record the interest at the end of the first year on both instruments using the effective interest method. $($Round answers to $0$

decimal places, e$.$g$.5,275.$ Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry

is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit

$($To record interest on five$-$year note$)$

$($To record interest on ten$-$year mortgage$)$ FIND THE ANSWERS IN THE BOXES HIGHLIGHTED RED