On January 1, 2017, Ellen Carter Company makes the two following acquisitions. 1. Purchases land having a

Question:

On January 1, 2017, Ellen Carter Company makes the two following acquisitions.
1. Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012.
2. Purchases equipment by issuing a 6%, 8-year promissory note having a value of $250,000 (interest payable annually). The company has to pay 11% interest for funds from its bank.
Instructions
(Round answers to the nearest cent.)
(a) Record the two journal entries that should be recorded by Ellen Carter Company for the two purchases on January 1, 2017.
(b) Record the interest at the end of the first year on both notes using the effective-interest method.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...