Reference no: EM132466111

Question 1: Prepare any adjusting journal entry that is required at the end of the ?scal year and the ?rst payment made on June 1, 2015, assuming no reversing entries are used.

Question 2: Assume that Silverman had insisted on obtaining an instalment note from MacDougall instead of a mortgage note.

Then do the following:

Problem 1. Calculate the amount of the instalment payments that would be required for a ?ve-year instalment note. Use the same cost of the land to MacDougall Corporation that you determined for the mortgage note in part (a).

Problem 2. Prepare an effective-interest amortization table for the five-year term of the instalment note.

Problem 3. Prepare the journal entry for the purchase of the land and the issuance of the instalment note.

Problem 4. Prepare any adjusting journal entry that is required at the end of the ?scal year and the ?rst payment made on June 1, 2015, assuming no reversing entries are used.

Problem 5. Compare the balances of the two different notes payable and related accounts at December 31, 2014. Be speci?c about the classifications on the statement of ?nancial position.

Problem 6. Consider why Silverman would insist on an instalment note in this case?