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On July 1, 2020, Teal Inc. made two sales. 1. ...

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Accounting

On July 1, 2020, Teal 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 $1,426,706. The land is carried on Teal's books at a cost of $593,200.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $401,380 (interest payable annually).

Teal 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 Teal Inc. for the sales transactions above that took place on July 1, 2020.

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