Questions -
Q1. On January 1, 2013, Crouser Company sold land to Chad Company, accepting a 2-year, $150,000 non-interest-bearing note due January 1, 2015. The fair value of the land was $123,966.90 on the date of sale. The company purchased the land for $120,000 on January 1, 2007.
Prepare all the journal entries on Crouser's books for January 1, 2013, through January 1, 2015, in regard to the Chad note. If required, round your answers to the nearest cent. For compound entries, if an amount box does not require an entry, leave it blank.
Q2. On January 1, 2013, Kelly Corporation acquired bonds with a face value of $500,000 for $483,841.79, a price that yields a 10% effective annual interest rate. The bonds carry a 9% stated rate of interest, pay interest semiannually on June 30 and December 31, are due December 31, 2016, and are being held to maturity.
a. Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the straight-line method of amortization. If required, round your answers to the nearest cent. For compound entries, if an amount box does not require an entry, leave it blank.
b. Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the effective interest method of amortization. If required, round your answers to the nearest cent. For compound entries, if an amount box does not require an entry, leave it blank.