Question
On July 1,2020, Cherry Inc made two sales. 1. It sold land having a fair value of $909,120 in exchange for a 4-year zero-interest -bearing
On July 1,2020, Cherry Inc made two sales.
1. It sold land having a fair value of $909,120 in exchange for a 4-year zero-interest -bearing promissory note in the face amount of $1,430,514. The land is carried on Cherry's books at a cost of $597,100
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $401,050 (interest payable annually)
Cherry Inc. recently had to pay 8% interest for money that it borrowed from Square National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Record the journal entries that should be recorded by Cherry Inc. for the sales transaction 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 and if no entry is required select 'no entry' and enter 0 for amounts)
No. | Date | Account Titles and Explanation | Debit | Credit |
1. | July 1, 2020 | Fill in | ||
fill in | ||||
fill in | ||||
fill in | ||||
2. | July 1, 2020 | fill in | ||
fill in | ||||
fill in |
*Please show your work and how you got your numbers. The above chart is the journal that needs to be completed.
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