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On January 1, 2023, Marigold Corporation acquired the following properties: 1. Investment property consisting of land and an apartment building in Toronto for $1.50 million.
On January 1, 2023, Marigold Corporation acquired the following properties: 1. Investment property consisting of land and an apartment building in Toronto for $1.50 million. To finance this transaction, Marigold issued a five-year interest-free promissory note to repay $2,307,941 on January 1,2028. 2. Vacant land in Rome, Italy, for $2.8 million. To finance this transaction, Marigold 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 Marigold 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 Marigold'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. 1.25124 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 O for the amounts. List all debit entries before credit entries.) 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.)
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