On January 1, 2023, Blue Spruce Corporation acquired the following properties: 1 2. Investment property consisting of land and an apartment building in Toronto for $1.50 million. To finance this transaction, Blue Spruce issued a five-year interest-free promissory note to repay $2.307,941 on January 1, 2028. Vacant land in Rome, Italy, for $2.2 million. To finance this transaction, Blue Spruce obtained a 7% mortgage for the full purchase price, secured by the land, with a maturity date of January 1, 2033. Interest is payable annually. If Blue Spruce borrowed this money from the bank, the company would need to pay 9% interest. factor table PRESENT VALUE OF 1. table PRESENT VALUE OF AN ANNUITY OF 1. (a) Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the value of the mortgage. Using the calculation from the tables, record Blue Spruce's journal entries on January 1, 2023, for each of the purchases. (Hint: Refer to Chapter 3 for tips on calculating) (Round present value factor calculations to 5 decimal places, eg 1.25124 and final answer to 0 decimal places e.g 58,971. 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 O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 1, 2023 Jan. 1, 2023 (To record purchase of land and building) (To record purchase of land) Debit Credit
On January 1, 2023, Blue Spruce Corporation acquired the following properties: 1 2. Investment property consisting of land and an apartment building in Toronto for $1.50 million. To finance this transaction, Blue Spruce issued a five-year interest-free promissory note to repay $2.307,941 on January 1, 2028. Vacant land in Rome, Italy, for $2.2 million. To finance this transaction, Blue Spruce obtained a 7% mortgage for the full purchase price, secured by the land, with a maturity date of January 1, 2033. Interest is payable annually. If Blue Spruce borrowed this money from the bank, the company would need to pay 9% interest. factor table PRESENT VALUE OF 1. table PRESENT VALUE OF AN ANNUITY OF 1. (a) Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the value of the mortgage. Using the calculation from the tables, record Blue Spruce's journal entries on January 1, 2023, for each of the purchases. (Hint: Refer to Chapter 3 for tips on calculating) (Round present value factor calculations to 5 decimal places, eg 1.25124 and final answer to 0 decimal places e.g 58,971. 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 O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 1, 2023 Jan. 1, 2023 (To record purchase of land and building) (To record purchase of land) Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no
Transcribed Image Text:On January 1, 2023, Blue Spruce Corporation acquired the following properties:
1
2.
Investment property consisting of land and an apartment building in Toronto for $1.50 million. To finance this transaction,
Blue Spruce issued a five-year interest-free promissory note to repay $2.307,941 on January 1, 2028.
Vacant land in Rome, Italy, for $2.2 million. To finance this transaction, Blue Spruce obtained a 7% mortgage for the full
purchase price, secured by the land, with a maturity date of January 1, 2033. Interest is payable annually. If Blue Spruce
borrowed this money from the bank, the company would need to pay 9% interest.
factor table PRESENT VALUE OF 1.
table PRESENT VALUE OF AN ANNUITY OF 1.
(a)
Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the value of the mortgage. Using the calculation
from the tables, record Blue Spruce's journal entries on January 1, 2023, for each of the purchases. (Hint: Refer to Chapter 3 for
tips on calculating) (Round present value factor calculations to 5 decimal places, eg 1.25124 and final answer to 0 decimal places e.g
58,971. 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 O for the amounts. List all debit entries before credit entries.)
Date Account Titles and Explanation
Jan.
1,
2023
Jan.
1,
2023
(To record purchase of land and building)
(To record purchase of land)
Debit
Credit
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