Answer:
Explanation:
1. JOURNAL ENTRIES
1)
Dr Land 310,000
Cr Discount on Notes Payable 160,602
Cr Notes Payable 470,602
2)
Dr Equipment 332,635
Cr Discount on Notes Payable 127,365
Notes Payable 460,000
Calculation of equipment cost:
{($460,000*0.3909) + ($460,000*6%*5.5370)} = $179,814 + $152821 = $332,635
b)
1)
Dr Interest Expense (310,000*11%) 34,100
Cr Discount on Notes payable 34,100
2)
Dr Interest Expense (332,635*11%) 36,590
Cr Notes payable 8,990
Cr Cash (460,000*6%) 27,600
