R (10 cs purchased a tract of land on May 1, 2015, by part snco b a 5-year nonin

Question

R (10 cs purchased a tract of land on May 1, 2015, by part snco b a 5-year noninterest-bearing note with a face value issuin $150,000 5.000. Enco has a December 31 fiscal Listed is the amortization table of the note that is based on year end. low belon the from 12% interest rate Enco usually incurs when it borrows banks. anks. Enco's fiscal year end is Dec 31. Required ke the journal entry to record the acquisition of the land on May life (May 1, 15 to May 1, 16). 1,2015through the first year of the note' s 2. Show how the note would appear on Enco's December 31,2015 balance sheet. Date 64,890 150,000 85,110 54,677 150,000 95, 323 43,238 150,000 106,762 5/1/16 10,213 10,213 5/1/17 11,439 11,439

Explanation / Answer

1) Date Account Debit$ Credit$ 1/5/2015 Land $      85,110 Discount on notes payable $      64,890 Notes Payable $   150,000 1/5/2016 Interest Expense $      10,213 Discount on notes payable $     10,213 Discount on notes payable $      10,213 Notes Payable $     10,213 2) Enco Dynamic Balance Sheet (Partial) December 31,2015 Liabilities Notes Payable $    150,000 Less: Discount on notes payable $    (64,890) $     85,110

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