On June 1, 2020, Indigo Corporation approached Silverman Corporation about buying a parcel of undeveloped land. Silverman was asking $258,000 for the land and Indigo saw that there was some flexibility in the asking price. Indigo did not have enough money to make a cash offer to Silverman and proposed to give, in return for the land, a $315,000, five-year promissory note that bears interest at the rate of 4%. 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 Indigo signed a mortgage note for $315,000 due June 1, 2025. Indigo 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 Indigo and Silverman have calendar year ends.

Q) Record the purchase of the land and prepare any journal entries that are required for the three years (up to December 31, 2022) from the beginning of the term of the note. Your amounts and dates must be cell-referenced to the Data worksheet and/or the debt amortization schedule.

• Prepare the statement of financial position presentation at the companys year-end (include both the current and long-term portions). Show the results for 3 years side-by-side. Your amounts, dates and company name must be cell-referenced to the Data and/or the debt amortization schedule and/or the journal entries.
• On the same worksheet, prepare the income statement presentation at year-end for 3 consecutive years, side-by-side. Your amounts, date and company name must be cell-referenced to the Data and/or the debt amortization schedule and/or the journal entries.

BONUS MARKS: On the same worksheet, prepare the statement of cash flows presentation of the note at year-end for 3 consecutive years, side-by-side. Your amounts must be cell-referenced to the Data and/or the debt amortization schedule and the journal entries. Show clearly the section of the statement (operating, investing or financing) and captions from the statement. Use the direct method

Assume that the seller had insisted on obtaining an instalment note from the buyer instead of a promissory mortgage note. Then do the following:

• Copy the Calculations worksheet and using Excel functions, calculate the amount of the instalment payments that would be required for a five-year instalment note. Use the cost of the land that you determined for the mortgage note in part (b).
• Prepare an effective-interest amortization table for the five-year term of the instalment note.
• Complete the right side of the Financial Statements worksheet. JOURNAL ENTRIES ARE NOT REQUIRED. You may find it easier to prepare your financial statements based on journal entries. Any entries prepared for the instalment note will not be graded. BONUS MARKS for the statement of cash flows impact.