Record the two journal entries that should be recorded

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Question - On May 1, 2020, Flounder Inc. made two sales.

1) It sold land having a fair value of $800,800 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,500,000.

The land is carried on Flounder's books at a cost of $575,000.

2) It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,750 (interest payable annually).

Flounder Inc. recently had to pay 8% interest for money that it borrowed from Smith Trust Bank.

The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.

Record the two journal entries that should be recorded by Flounder Inc. for the sales transaction above that took place on May 1, 2020.

Reference no: EM132521206

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