• (under Alternative 1), record the purchase of the land and prepare any journal entries that are required for the three years (up to December 31, 2022)

• 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.

• prepare the income statement presentation at year-end for 3 consecutive years, side-by-side

• 2) 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). Use also the same interest rate and term for the note.

• Prepare an effective-interest amortization table for the five-year term of the instalment note.

• 

• Repeat the same steps of alternative 1( Journal entries, Financial postition, income statement, Cash Flows)

• ALTERNATIVE 3: This alternative consists of a non-interest bearing note. The face amount of the note is included in your template and is calculated from your question data.

• On the Calculations worksheet (under Alternative 3) and using Excel functions, calculate the rate applied to this note. Use the cost of the land that you determined for the mortgage note in part (b). Use also the same term for the note.

• Prepare an effective-interest amortization table for the five-year term of the non-interest bearing note.

• 4)

• You are asked to help the purchasing company decide which option is best amongst the three alternatives. The company has the following constraints:

• The company has other pre-existing loan arrangements that have covenants that require it to maintain a current ratio of 2.0 and a debt ratio of less than 68%. These other loan arrangements are long-term liabilities that will be outstanding for the full term of the three alternative notes. You can assume that everything else will stay the same for the purchasing company over the term of the new loan.

• The purchasing company is currently short on cash, so maintaining cash is an important goal for them.

• The companys pre-existing current assets, current liabilities, total assets and total liabilities have been included in the Data worksheet.

• 

On June 1, 2020, Bridgeport Corporation approached Silverman Corporation about buying a parcel of undeveloped land. Silverman was asking $264,000 for the land and Bridgeport saw that there was some flexibility in the asking price. Bridgeport did not have enough money to make a cash offer to Silverman and proposed to give, in return for the land, a $305,000, 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 Bridgeport signed a mortgage note for $305,000 due June 1, 2025. Bridgeport 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 Bridgeport and Silverman have calendar year ends. Enter the WileyPlus question data in the blue boxes. Name of buying company Bridgeport Corporation Asking price of land $264 000 Face amount of note $305 000 Purchase date 2020-06-01 Interest rate in note 4% Effective interest rate 10% Term of note Buying company's year end date 2025-06-01 Face amount of Alternative #3 note $420 000 Buying company financial data BEFORE this transaction: Current assets $875 000 Current liabilities $425 000 Total assets $1 650 000 $975 000 Total liabilities Credit threshholds Current ratio 2,00 68% Debt ratio 5 years JOURNAL ENTRIES Date ALTERNATIVE 1 Account title 2020-06-01 land Note Payable 1900-01-00 Interset Expense Note Payable Interest Payable Debit 0 0 Credit 0 0 0 Future value Cate erm ayments V Date Payment ALTERNATIVE 1 Discount Interset Amortization Carrying Amount of Note ALTERNATIVE 1 Name of Company Partial Statement of Financial Position Date 2020 Name of Company Partial Income Statement Date Name of Company Statement of Cash Flows Date 2020 2020 2021 2021 2021 2022 2022 2022 Future value Rate Term Payments PV Date ALTERNATIVE 2 0 10% Payment 5 $0 $0 $0 $0 $0 $0 Discount Interset Amortization 2 Carrying Amount of Note . F Current assets Current liabilities Total assets Total liabilities Current ratio before transaction Debt ratio Increase/Decrease in current assets Increase in total assets Increase in current liabilities Increase in total liabilities Current ratio Debt ratio Total Interest expense over the term of the note THRESHHOLDS: Current ratio Debt ratio ALTERNATIVE 1 2021 2020 2022 ALTERNATIVE 2 2021 2020 2022 ALTERNATIVE 3 2021 2022 2020