On July 1, 2017, Agincourt Inc. made two sales. 1.It sold land having a fair value of
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Question:
On July 1, 2017, Agincourt Inc. made two sales.
- 1.It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt's books at a cost of $590,000.
- 2.It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest payable annually).
Agincourt 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.
Could you prepare an amortization schedule for both questions. Assume that the effective-interest method is used for amortization purposes? For the second question, you could just do 3 or 4 years; I will understand how that works.Thank you very much!
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