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Purchases land having a fair value of $360,000.00 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $566,467.06. 2. Purchases equipment by issuing a 7%, 9-year promissory note having a maturity value of $520,000.00 (interest payable annually). The company has to pay 12% interest for funds from its bank. Click here to view factor tables. (a) Record the two journal entries that should be recorded by Sandhill 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

Purchases land having a fair value of $360,000.00 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $566,467.06. 2. Purchases equipment by issuing a 7%, 9-year promissory note having a maturity value of $520,000.00 (interest payable annually). The company has to pay 12% interest for funds from its bank. Click here to view factor tables. (a) Record the two journal entries that should be recorded by Sandhill 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

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 10RE
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Purchases land having a fair value of $360,000.00 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $566,467.06.

2. Purchases equipment by issuing a 7%, 9-year promissory note having a maturity value of $520,000.00 (interest payable annually).

The company has to pay 12% interest for funds from its bank.

Click here to view factor tables.

(a) Record the two journal entries that should be recorded by Sandhill 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

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