On June 1, 2020, Flint Corporation approached Silverman Corporation about buying a parcel of undeveloped land. Silverman was asking $254,000 for the land and Flint saw that there was some flexibility in the asking price. Flint did not have enough money to make a cash offer to Silverman and proposed to give, in return for the land, a $300,000, five-year promissory note that bears interest at the rate of 5%. The interest is to be paid annually to Silverman Corporation on June 1 of each of the next five years. Silverman insisted that the note taken in return become a mortgage note. Silverman accepted the amended offer, and Flint signed a mortgage note for $300,000 due June 1, 2025. Flint would have had to pay 10% at its local bank if it were to borrow the cash for the land purchase. Silverman, on the other hand, could borrow the funds at 9%. Both Flint and Silverman have calendar year ends.

calculate the purchase price of the land and prepare an effective interest amortization table for the term of the mortgage note payable that is given in the exchange. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275.)

Purchase price of the land

$

Mortgage Note Payable Interest Amortization

Date

Cash Paid

Interest Expense

Discount Amortized

Note Carrying Amount

June 1 2020

$

June 1 2021

$

$

$

June 1 2022

June 1 2023

June 1 2024

June 1 2025

$

$

Prepare any adjusting entry that is required at the end of the fiscal year and the first payment made on June 1, 2021, assuming no reversing entries are used. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020
June 1, 2021

Prepare the journal entry for the purchase of the land and the issuance of the instalment note. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
June 1, 2020

Prepare any adjusting journal entry that is required at the end of the fiscal year and the first payment made on June 1, 2021, assuming no reversing entries are used. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020
June 1, 2021

eTextbook and Media

List of Accounts

Compare the balances of the two different notes payable and related accounts at December 31, 2020. Be specific about the classifications on the statement of financial position. Mortgage Note Payable

Flint Corporation (Partial) Statement of Financial Position For the Quarter Ended December 31, 2020December 31, 2020For the Year Ended December 31, 2020
Total Liabilities and Partners' EquityIntangible AssetsTotal LiabilitiesTotal AssetsProperty, Plant, and EquipmentCurrent LiabilitiesPartners' EquityTotal Long-term InvestmentsLong-term debt InvestmentsTotal Non-current LiabilitiesCurrent AssetsTotal Intangible AssetsTotal Current LiabilitiesTotal Partners' EquityTotal Current AssetsTotal Property, Plant and EquipmentNon-current Liabilities
		$
Total AssetsTotal Current LiabilitiesIntangible AssetsTotal Partners' EquityProperty, Plant, and EquipmentTotal Non-current LiabilitiesPartners' EquityLong-term debt InvestmentsTotal Intangible AssetsTotal Current AssetsTotal LiabilitiesTotal Property, Plant and EquipmentCurrent LiabilitiesTotal Liabilities and Partners' EquityTotal Long-term InvestmentsNon-current LiabilitiesCurrent Assets

Instalment Note Payable

Flint Corporation (Partial) Statement of Financial Position For the Quarter Ended December 31, 2020For the Year Ended December 31, 2020December 31, 2020
Long-term debt InvestmentsTotal Current AssetsTotal Liabilities and Partners' EquityCurrent AssetsTotal AssetsTotal Property, Plant and EquipmentTotal Non-current LiabilitiesTotal Long-term InvestmentsTotal LiabilitiesCurrent LiabilitiesTotal Partners' EquityIntangible AssetsProperty, Plant, and EquipmentNon-current LiabilitiesPartners' EquityTotal Current LiabilitiesTotal Intangible Assets
		$
Total Partners' EquityIntangible AssetsTotal Non-current LiabilitiesTotal Intangible AssetsCurrent LiabilitiesNon-current LiabilitiesTotal Current LiabilitiesTotal Current AssetsProperty, Plant, and EquipmentTotal Long-term InvestmentsCurrent AssetsTotal Liabilities and Partners' EquityPartners' EquityLong-term debt InvestmentsTotal Property, Plant and EquipmentTotal AssetsTotal Liabilities