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Unformatted text preview: ue annually . Debit
900,000 Credit 930,000
120,000 a . Compute the pres ent value of the note rec eivable from Sk y line Developers at the date of s ale,
as s uming that a realis tic rate of interes t for this trans ac tion is 12 perc ent. (Hint: Cons ider both the
annual interes t pay ments and the maturity value of the note.) (Round your PV fa ctor to 3 de cim a l
pla ce s a nd fina l a nsw e r to the ne a re st dolla r a m ount. Om it the "$" sign in your re sponse .)
Pres ent value $ 640,080 b. Prepare the journal entry on Dec ember 31 to rec ord the s ale of the land c orrec tly . (Round your PV
fa ctor to 3 de cim a l pla ce s a nd fina l a nsw e rs to the ne a re st dolla r a m ount. Om it the "$" sign
in your re sponse .)
Dec . 31 General Journal
Los s on s ale of land Debit
139,920 Cas h 150,000 Notes rec eivable Credit 640,080 Land 930,000 c-1 Ex plain what effec ts the error made by Ric hland Farms 's ac c ountant will have on the net inc ome in
the y ear of the s ale. Ignore inc ome tax es . (Om it the "$" sign in your re sponse .) http://ezto.mhecloud.mcg r aw- hill.com/hm_accounting .tpx?todo= pr intview 20/21...
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This note was uploaded on 01/30/2014 for the course ACC 111 taught by Professor Angela during the Fall '08 term at Delaware County CC.
- Fall '08