On January 1, 2023, Sparrow Corporation sold land that originally cost $250,000. Sparrow accepted a note from the buyer that requires 12 equal annual payments of $33,000 commencing on December 31, 2023. The interest rate on the note is 6%. Required: a. Is the note in this case considered short term or long term? b. Prepare the entry for Gold Co. for the sale of the land on January 1, 2023.
On January 1, 2023, Sparrow Corporation sold land that originally cost $250,000. Sparrow accepted a note from the buyer that requires 12 equal annual payments of $33,000 commencing on December 31, 2023. The interest rate on the note is 6%. Required: a. Is the note in this case considered short term or long term? b. Prepare the entry for Gold Co. for the sale of the land on January 1, 2023.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:On January 1, 2023, Sparrow Corporation sold land that originally cost $250,000. Sparrow accepted a note from the buyer that requires 12
equal annual payments of $33,000 commencing on December 31, 2023. The interest rate on the note is 6%.
Required:
a. Is the note in this case considered short term or long term?
b. Prepare the entry for Gold Co. for the sale of the land on January 1, 2023.
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