Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1.2020. 5tellar company makes the two f

On January 1.2020. 5tellar Company makes the two following acquistions. 1. Purchases land having a...

80.2K

Verified Solution

Question

Accounting

image
image
On January 1.2020. 5tellar Company makes the two following acquistions. 1. Purchases land having a fair value of $240,000 by issuing as vear, zero-interest-bearing promissory note in the face aroount of $404,424. 2. Purchases equigment by liswing a 6%, 9 year promissory note hwirg a maturity value of $390,000 interest pavable: anteraily). The compary has to pay 11% interest tor funds from its bank. (a) Record the twojournal entries that should be recorded by Stellar Compary for the two gurchases an Jancary 1, 2020: (b) Record the interest at the end of the first year on both notes using the effective interest method. Pround present value foctor calculations to 5 decimal places, es. 1.25124 and the final enswer to 0 decimal placerks. 58,971. If no entry is required, select "No Entry" for the eccount titles and enter 0 for the amounts. Credit account titles are gutomatically indented when omount is entered. Do not indent manuallyd No, Date Account Tities and Explanation (a) January 1 . 1. 2020 Discount en Noter Payable Credit Notes Payable 240000 2. January 1, Equipment. 387873 Oiscount on Netes Payable 2127 Notes Payable 4878732127 (b) December Interest Expense 1. 31,2020 Discount on Notes Payable 2. December Interest Expense

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students