Problemon july 1 2017 stellar inc made two sales1it sold, Ask an Expert

Accounting

Problem

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

1. It sold land having a fair value of $917,040 in exchange for a 3-year zero-interest-bearing promissory note in the face amount of $1,288,376. The land is carried on Stellar's books at a cost of $591,800.

2. It rendered services in exchange for a 5%, 6-year promissory note having a face value of $405,360 (interest payable annually).

Stellar Inc. recently had to pay 8% 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 12% interest.

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

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92719659

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