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Record the two journal entries that should be recorded

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Question - On August 1, 2020, Johns Company made two sales.

1) It sold a land having a fair value of $1,250,800 in exchange for a 6-year zero-interest-bearing promissory note in the face amount of $2,700,000. The land is carried on John's books at a cost of $860,000.

2) It rendered services in exchange for a 7%, 10-year promissory note having a face value of $600,350 (interest payable annually).

Johns Company recently had to pay 9% interest for money that it borrowed from US Bank. The customers in these two transactions have credit ratings that require them to borrow money at 10% interest.

Record the two journal entries that should be recorded by Johns Company for the sales transaction above the took place on August 1, 2020.

Reference no: EM132521333

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