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On July 1, 2017, Grouper Inc. made two sales. 1. It sold land having a fair value of $918,380 in exchange for a4-year zero-interest-bearing promissory
On July 1, 2017, Grouper Inc. made two sales.
1. | It sold land having a fair value of $918,380 in exchange for a4-year zero-interest-bearing promissory note in the face amount of $1,394,168. The land is carried on Grouper's books at a cost of $592,400. |
2. | It rendered services in exchange for a5%,8-year promissory note having a face value of $404,520 (interest payable annually). |
Grouper Inc. recently had to pay8% 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 at11% interest.
Record the two journal entries that should be recorded by Grouper Inc. for the sales transactions above that took place on July 1, 2017.
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