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On December 31, 2010, ABC Company sold property to XYZ Company in exchange for a 3 year, 3% promissory note in the face amount of $750,000. The property is carried on ABC's books at a cost of $350,000. ABCs year end is also December 31. * the fair market value of the land should be calculated in this problem Sunshine's cost of borrowing is 5% while Sky's cost of borrowing is 8%. Prepare the amortization schedule and journal entries that would be recorded by Sunshine for:

a) The sales transaction on December 31, 2010.

b) The journal entry for December 31, 2011.

c) The journal entries for December 31, 2012 and December 31, 2013. (Hint: there should be three).

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9986857

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