On January 1, 2025, Fisher Company makes the two following acquisitions.1.2.Purchases land having a fair market value of $800,000 by issuing a 5-year, zero-interest-bearing promissory note in the faceamount of $1,175,468.Purchases equipment by issuing a 4%, 8-year promissory note having a maturity value of $350,000 (Interest payable annuallyon January 1).The company has to pay 8% interest for funds from its bank.(a)(b)Record the two journal entries that should be recorded by Fisher 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.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal place, e.g.58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles areautomatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.Record journal entries in the order presented in the problem.)DateAccount Titles and ExplanationDebitCredit

Solution to Part (A) and (B) - Journal Entries & Calculations for Fisher Company:We will go step…

Answered: On January 1, 2025, Fisher Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2025, Sunland Company makes the two following acquisitions. 1. Purchases land having a fair market value of $860,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $1,263,622. 2. Purchases equipment by issuing a 5%, 9-year promissory note having a maturity value of $350,000 (Interest payable annually on January 1). The company has to pay 9% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Sarasota 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.
On January 1, 2020, Pronghorn Company makes the two following acquisitions. 1. Purchases land having a fair market value of $220,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $323,252. 2. Purchases equipment by issuing a 5%, 8-year promissory note having a maturity value of $350,000 (interest payable annually).
On January 1, 2020, Carter Company makes the two following acquisitions. 1. Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012. 2. Purchases equipment by issuing a 6%, 8-year promissory note having a maturity value of $250,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. Instructions (Round answers to the nearest cent.) a. Record the two journal entries that should be recorded by Carter Company for the two purchases on January 1, 2020. b. Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Ivanhoe Company makes the two following acquisitions. 1. Purchases land having a fair value of $ 150,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $ 252,759. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $ 180,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Ivanhoe Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
On January 1, 2025, Wildhorse Company makes the two following Acquisitions: 1. Purchase land having a fair value of $290,000.00 by issuing a 5-year zero-intrest-bearing promissory note in the face amount of $467,048. 2. Purchase equipment by issuing a 7%, 9-year promissory note having a maturity value of $450,000.00 (intrest payable annually) The company has to pay 10% intrest for funds from its bank. (a) Record two journal entries taht should be recorded by Wildhorse Comapny for the two purchases on January 1, 2025 (b) Record the intrest at the end of the first year on both notes using the effective-intrest method
On January 1, 2020, Blossom Company makes the two following acquisitions. 1. Purchases land having a fair value of $160,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $257,682. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $230,000 (interest payable annually). The company has to pay 10% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Blossom Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Sage Company makes the two following acquisitions. 1. Purchases land having a fair value of $220,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $333,975. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $340,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Sage Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Concord Company makes the two following acquisitions. 1. Purchases land having a fair value of $370,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $561,686. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $550,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Concord Company for the two purchases on January 1, 2020. (b) Record the interest at the end of th
On January 1, 2020, Sweet Company makes the two following acquisitions. 1. Purchases land having a fair value of $260,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $458,209. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $410,000 (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 Sweet Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account…
On January 1, 2014, Fisher Company makes the two following acquisitions Purchases land having a fair market value of $800,000 by issuing a 5-year, zero - interest - bearing promissory note in the face amount of $1, 175, 464. 6 Purchases equipment by issuing a 4%, 8-year promissory note having a maturity value of $350,000 (interest payable annually). The company has to pay 8% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Fisher Company for the two purchases on January 1, 2014. (b) Record the interest at the end of the first two years on both notes using the effective - interest method.
On January 1, 2017, Fisher Company makes the two following acquisitions: Purchases land habing a fair market value of $800,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $1,175,464. Purchases equipment by issuing a 4%, 8-year promissory note having a maturity value of $350,000 (interest payable annually). The company has to pay 8% interest for funds from its bank. Instructions: Record the two journal entries that should be recorded by Fisher Company for the two purchases on January 1, 2017. Record the interest at the end of the first year on both notes using the effective-interest method.
Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $713,300 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $641,000. Credit balances are indicated by parentheses. Adams Clay Current assets $ 382,000 $ 272,000 Investment in Clay 713,300 0 Equipment 837,000 584,000 Liabilities (202,000 ) (224,000 ) Common stock (350,000 ) (150,000 ) Retained earnings, 1/1/20 (1,380,300 ) (482,000 ) In 2020, Clay earns a net income of $74,100 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $160,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Adams Clay Revenues $ (544,000 ) $ (286,000 ) Expenses 394,400 214,500 Investment…

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