On July 1, 2014, Agincourt Inc. made two sales: 1. It sold excess land in exchange for

Question:

On July 1, 2014, Agincourt Inc. made two sales:
1. It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,101,460. The land's carrying value is $590,000.
2. It rendered services in exchange for an eight-year promissory note having a of $400,000. Interest at a rate of 3% is payable annually.
The customers in the above transactions have credit ratings that require them to borrow money at 12% interest.
Agincourt recently had to pay 8% interest for money it borrowed from British National Bank.
3. On July 1, 2014, Agincourt also agreed to accept an installment note from one of its customers in partial settlement of that were overdue. The note calls for four equal payments of $20,000, including the principal and interest due, on the anniversary of the note. The implied interest rate on this note is 10%.
Instructions
(a) Prepare the journal entries to record the three notes receivable transactions of Agincourt Inc. on July 1, 2014.
(b) Prepare an effective-interest amortization table for the installment note obtained in partial collection of From Agincourt's perspective, what are the advantages of an installment note compared with a non-interest-bearing note?
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