Question
On July 1, 2020, Headland Inc. made two sales It sold land having a fair value of $902,220 in exchange for a4-year zero-interest-bearing promissory note
On July 1, 2020, Headland Inc. made two sales
It sold land having a fair value of $902,220 in exchange for a4-year zero-interest-bearing promissory note in the face amount of $1,419,656. The land is carried on Headland's books at a cost of $590,900.
It rendered services in exchange for a3%,8-year promissory note having a face value of $402,150 (interest payable annually).
Headland 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 at12% interest.
Record the two journal entries that should be recorded by Headland Inc. for the sales transactions above that took place on July 1, 2020.
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