On January 1, 2021, PARCELLE Inc. sold a piece of undeveloped land in exchange for a six-year promissory note having a face value of $1,500,000. Interest at a rate of 3% is payable annually on January 1 (first payment Jan 1, 2022). The buyer's credit rating requires them to borrow money at 8% interest. PARCELLE uses IFRS. Required: Show and label all calculations. (Round to the nearest dollar.) a) What would be recorded as the value of the land sale on January 1, 2021? b) How much interest revenue will be recorded by PARCELLE in 2021? c) What will be recorded on PARCELLE's December 31, 2021 Balance Sheet as a result of this land sale?

On January 1, 2021, PARCELLE Inc. sold a piece of undeveloped land in exchange for a six-year promissory note having a face value of $1,500,000. Interest at a rate of 3% is payable annually on January 1 (first payment Jan 1, 2022). The buyer's credit rating requires them to borrow money at 8% interest. PARCELLE uses IFRS. Required: Show and label all calculations. (Round to the nearest dollar.) a) What would be recorded as the value of the land sale on January 1, 2021? b) How much interest revenue will be recorded by PARCELLE in 2021? c) What will be recorded on PARCELLE's December 31, 2021 Balance Sheet as a result of this land sale?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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