1. 2. Purchases land having a fair value of $220,000.00 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $333,975. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $280,000.00 (interest payable annually). The company has to pay 11% interest for funds from its bank. Click here to view factor tables. (a) Record the two journal entries that should be recorded by Sheridan Company for the two purchases on January 1, 2025. Record the interest at the end of the first year on both notes using the effective-interest method. (b)
1. 2. Purchases land having a fair value of $220,000.00 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $333,975. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $280,000.00 (interest payable annually). The company has to pay 11% interest for funds from its bank. Click here to view factor tables. (a) Record the two journal entries that should be recorded by Sheridan Company for the two purchases on January 1, 2025. Record the interest at the end of the first year on both notes using the effective-interest method. (b)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please provide answer in text (Without image) ,,, every entry should have narration please
Transcribed Image Text:On January 1, 2025, Sheridan Company makes the two following acquisitions.
1.
2.
The company has to pay 11% interest for funds from its bank.
Click here to view factor tables.
(a) Record the two journal entries that should be recorded by Sheridan Company for the two purchases on January 1, 2025.
(b) Record the interest at the end of the first year on both notes using the effective-interest method.
No.
(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 2 decimal places, e.g. 58,971.25. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount
is entered. Do not indent manually. List all debit entries before credit entries.)
(a)
1.
N
2.
Purchases land having a fair value of $220,000.00 by issuing a 4-year, zero-interest-bearing promissory note in the face
amount of $333,975.
(b)
1.
Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $280,000.00 (interest payable
annually).
N
2.
Date
Account Titles and Explanation
Debit
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