1. Purchases land having a fair value of €160,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of €251.763 2 Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of €270.000 (interest payable annually). The company has to pay 12% interest for funds from its bank. Record the two journal entries that should be recorded by Metlock AG for the two purchases on January 1, 2022 Record the interest at the end of the first year on both notes. (a) (b)
1. Purchases land having a fair value of €160,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of €251.763 2 Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of €270.000 (interest payable annually). The company has to pay 12% interest for funds from its bank. Record the two journal entries that should be recorded by Metlock AG for the two purchases on January 1, 2022 Record the interest at the end of the first year on both notes. (a) (b)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please don't give image format
Transcribed Image Text:No. Date
(a)
2.
January 1,
2022
January 1,
2022
(b)
December
1. 31.2022
December
31, 2022
Account Titles and Explanation
Land
Debit
Credit
Transcribed Image Text:1.
2
Purchases land having a fair value of €160,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount
of €251.763
Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of €270.000 (interest payable
annually)
The company has to pay 12% interest for funds from its bank.
(a)
Record the two journal entries that should be recorded by Metlock AG for the two purchases on January 1, 2022
(b) Record the interest at the end of the first year on both notes.
(Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 58,971. 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 amount is
entered. Do not indent manually)
Account Titles and Explanation
(a)
1.
No. Date
January 1.
2022
Land
Q Search
no
6
Debit
71
D
L
O
D
Credit
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