Question
On July 1, 2020, Metlock Inc. made two sales. 1. It sold land having a fair value of $901,000 in exchange for a 4-year zero-interest-bearing
On July 1, 2020, Metlock Inc. made two sales.
1. | It sold land having a fair value of $901,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,417,737. The land is carried on Metlock's books at a cost of $592,800. | |
2. | It rendered services in exchange for a 3%, 8-year promissory note having a face value of $403,820 (interest payable annually). |
Metlock 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. Record the two journal entries that should be recorded by Metlock Inc. for the sales transactions above that took place on July 1, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
No. | Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|---|
1. | July 1, 2020 | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount | ||
2. | July 1, 2020 | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount |
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