On January 1, 2016, Domino Incorporated sells factory equipment to Jon Jon Associates in return...
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Accounting
On January 1, 2016, Domino Incorporated sells factory equipment to Jon Jon Associates in return for a $900,000, 3 year, zero interest note maturing on December 31, 2019. The cost of the equipment is $1,000,000 and the accumulated depreciation is $300,000 on the books of Domino Incorporated. The normal borrowing rate for Jon Jon is 6%.
Required:
1) Prepare the journal entry to record the sale of the land on Dominos books.
2) Prepare an amortization table using the effective interest method.
3) Prepare the journal entries to record the interest revenue in 2016, 2017 and 2018 for Domino.
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