Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2013, McLean Company makes the two following acquisitions. 1.Purchases land having a fair value of $377,000 by issuing a 4-year, zero-interest-bearing promissory
On January 1, 2013, McLean Company makes the two following acquisitions. 1.Purchases land having a fair value of $377,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $593,217. 2.Purchases equipment by issuing a 6%, 8-year promissory note having a maturity value of $410,000. (interest payable annually). The company has to pay 12% interest for funds from its bank. (a) Record the two journal entries that should be recorded by McLean Company for the two purchases on January 1, 2013. (b) Record the interest at the end of the first year on both notes using the effective-interest method I have 1a done I am having issues with the rest 1a) land debit 377000 disount on notes payable debit 216217 notes payable credit 593217 2a) Equipment debit? Discount on notes payable debit? notes payable credit of 410000 1b) interst expense debit? interest payable credit ? 2b) interst expense debit? discount on notes payable credit? cash credit ? if someone could show the formula on how to do these Thanks
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