On January 1 2017, Shamrock company makes the two following acquisitions.

1. purchases land having a fair value of $ 280,000 by issuing a 4 year, zero interest-bearing promissory note in the face amount of $425,060

2. Purchase equipment by issuing a 7%, 8-year promissory note having a maturity value of $ 370,000( 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 shammrock

(b) Record the interest at the end of the first year on both notes using the effective-interest method

No Date Account titles and Explanation Debit Credit

(a) 1. January 1, 2017 _______________________________ _____________________ ___________________

________________________________ _____________________ _______________________

______________________ __________________ _______________________-

2. Jan 1, 2017 ___________________________ _________________________ _________________________

________________________ ________________________ ________________________

___________________ _______________________ ________________

(b) Dec 31, 2017 ________________________ ___________________ ___________________

________________________ _________________________ __________________