(a) Record two journal entries taht should be recorded by Wildhorse Comapny for the two purchases on January 1, 2025 (b) Record the intrest at the end of the first year on both notes using the effective-intrest method

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2025, Wildhorse Company makes the two following Acquisitions:

1.  Purchase land having a fair value of $290,000.00 by issuing a 5-year zero-intrest-bearing promissory note in the face amount of $467,048.

2.  Purchase equipment by issuing a 7%, 9-year promissory note having a maturity value of $450,000.00 (intrest payable annually)

The company has to pay 10% intrest for funds from its bank.

(a) Record two journal entries taht should be recorded by Wildhorse Comapny for the two purchases on January 1, 2025

(b) Record the intrest at the end of the first year on both notes using the effective-intrest method

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