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Presented below are two independent situations: Click here to view factor tables. (a) On January 1, 2025, Sarasota Inc. purchased land that had an assessed value of $321,000 at the time of purchase. A $561,000, zero-interest-bearing note due January 1, 2028, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%. Determine at what amount the land should be recorded at January 1, 2025, and the interest expense to be reported in 2025 related to this transaction. (Round intermediate calculation to 5 decimal places, e.g. 0.23451 and final answers to O decimal places, e.g. 38,548) Land to be recorded at January 1, 2025 $ Interest expense to be reported 399309 47917

Presented below are two independent situations: Click here to view factor tables. (a) On January 1, 2025, Sarasota Inc. purchased land that had an assessed value of $321,000 at the time of purchase. A $561,000, zero-interest-bearing note due January 1, 2028, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%. Determine at what amount the land should be recorded at January 1, 2025, and the interest expense to be reported in 2025 related to this transaction. (Round intermediate calculation to 5 decimal places, e.g. 0.23451 and final answers to O decimal places, e.g. 38,548) Land to be recorded at January 1, 2025 $ Interest expense to be reported 399309 47917

FINANCIAL ACCOUNTING
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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(b) On January 1, 2025, Ivanhoe Furniture borrowed $5,600,000 (face value) from Sinise Co., a major customer, through a zero- interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Ivanhoe Furniture agreed to sell furniture to this customer at lower than market price. A 8% rate of interest is normally charged on this type of loan. Prepare the journal entry to record this transaction. (Round intermediate calculation to 5 decimal places, e.g. 0.23451 answers to O decimal places, e.g. 38,548. 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.) Account Titles and Explanation Cash Discount on Notes Payable Notes Payable Unearned Sales Revenue Debit Interest expense to be reported for 2025 5600000 Credit 5600000 Determine the amount of interest expense to report for 2025. (Round answer to O decimal places, e.g. 38,548.)
Transcribed Image Text:(b) On January 1, 2025, Ivanhoe Furniture borrowed $5,600,000 (face value) from Sinise Co., a major customer, through a zero- interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Ivanhoe Furniture agreed to sell furniture to this customer at lower than market price. A 8% rate of interest is normally charged on this type of loan. Prepare the journal entry to record this transaction. (Round intermediate calculation to 5 decimal places, e.g. 0.23451 answers to O decimal places, e.g. 38,548. 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.) Account Titles and Explanation Cash Discount on Notes Payable Notes Payable Unearned Sales Revenue Debit Interest expense to be reported for 2025 5600000 Credit 5600000 Determine the amount of interest expense to report for 2025. (Round answer to O decimal places, e.g. 38,548.)
Presented below are two independent situations: Click here to view factor tables. (a) On January 1, 2025, Sarasota Inc. purchased land that had an assessed value of $321,000 at the time of purchase. A $561,000, zero-interest-bearing note due January 1, 2028, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%, Determine at what amount the land should be recorded at January 1, 2025, and the interest expense to be reported in 2025 related to this transaction. (Round intermediate calculation to 5 decimal places, e.g. 0.23451 and final answers to O decimal places, e.g. 38,548.) Land to be recorded at January 1, 2025 Interest expense to be reported $ 399309 47917
Transcribed Image Text:Presented below are two independent situations: Click here to view factor tables. (a) On January 1, 2025, Sarasota Inc. purchased land that had an assessed value of $321,000 at the time of purchase. A $561,000, zero-interest-bearing note due January 1, 2028, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%, Determine at what amount the land should be recorded at January 1, 2025, and the interest expense to be reported in 2025 related to this transaction. (Round intermediate calculation to 5 decimal places, e.g. 0.23451 and final answers to O decimal places, e.g. 38,548.) Land to be recorded at January 1, 2025 Interest expense to be reported $ 399309 47917
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