- Recording Entries For Long Term Note Receivable Effective Interest Method On January 1 2020 Jacobs Company Sells Land 1 (53.97 KiB) Viewed 51 times
Recording Entries for Long-Term Note Receivable; Effective-Interest Method On January 1, 2020, Jacobs Company sells land financed through a $32,000 note, issued by Andress Company. The note is a $32,000,9%, annual interest-bearing note. Andress agrees to repay the $32,000 proceeds on December 31, 2021, The prevailing interest rate on similar notes is 11%. Assume that the cost of the land is equal to the fair value of the note. Required Prepare all entries for Jacobs over the note term, including any year-end adjustments. Use the effective interest method to amortize the discount. Round answers to the nearest whole dollar, Account Name Dr. Cr. Date Jan 1, 2020 0 0 0 0 0 0 Land Dec. 31, 2020 Cash 0 0 0 0 0 0 Dec. 31, 2021 Cash 0 0 0 0 0 0 To record interest on note Dec. 31, 202 0 0 0 To record settlement of note Check