Prepare the journal entries for these transactions

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Reference no: EM131287270

Cool Globe Inc. entered into two transactions, as follows: 1. Purchased equipment paying $20,500 down and signed a noninterest-bearing note requiring the balance to be paid in four annual installments of $20,500 on the anniversary date of the contract. Based on Cool Globe's 8% borrowing rate for such transactions, the implicit interest cost is $14,101. 2. Purchased a tract of land in exchange for $10,500 cash down payment and a noninterest-bearing note requiring six $10,500 annual payments, with the first annual payment in one year. The fair value of the land is $59,000. Required: Prepare the journal entries for these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Reference no: EM131287270

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