aj.3 (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 thiscustomer 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 decimalplaces, 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 areautomatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)Account Titles and ExplanationCashDiscount on Notes PayableNotes PayableUnearned Sales RevenueDebitInterest expense to be reported for 20255600000Credit5600000Determine 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 aready 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 tothis 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, 2025Interest expense to be reported$39930947917

A zero-interest-bearing note is a debt that does not include the written obligation that the…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(a) On January 1, 2025, Skysong Inc. purchased land that had an assessed value of $376,000 at the time of purchase. A $585,000, 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 $ $ (b) On January 1, 2025, Concord Furniture borrowed $3,600,000 (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, Concord Furniture agreed to sell furniture to this customer at lower than market price. A 10% rate…
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