On January 1, Year 1, a company purchased land costing $800,000. Instead of paying cash at the time of purchase, the company plans to make four installment payments of $215,221.64 on June 30 and December 31 in Year 1 and Year 2. The payments include interest at a rate of 6%. Required: 1. Record the purchase of land when the note is issued. 2. Record the first installment payment on June 30, Year 1, and the second installment payment on December 31, Year 1. 3. Calculate the balance of Notes Payable and Interest Expense on December 31, Year 1.

On January 1, Year 1, a company purchased land costing $800,000. Instead of paying cash at the time of purchase, the company plans to make four installment payments of $215,221.64 on June 30 and December 31 in Year 1 and Year 2. The payments include interest at a rate of 6%. Required: 1. Record the purchase of land when the note is issued. 2. Record the first installment payment on June 30, Year 1, and the second installment payment on December 31, Year 1. 3. Calculate the balance of Notes Payable and Interest Expense on December 31, Year 1.

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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