(Answered) Problemon july 1 2017 sandhill inc made two sales1it sold

Accounting

Problem

On July 1, 2017, Sandhill Inc. made two sales.

1. It sold land having a fair value of $906,700 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,376,436. The land is carried on Sandhill books at a cost of $593,200.

2. It rendered services in exchange for a 4%, 8-year promissory note having a face value of $401,380 (interest payable annually).

Sandhill Inc. recently had to pay 9% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 11% interest.

Record the two journal entries that should be recorded by Sandhill Inc. for the sales transactions above that took place on July 1, 2017.

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