On January 1, 2013, Lisa Company sold machinery with a book value of $118,000 to Mark Company.

Question:

On January 1, 2013, Lisa Company sold machinery with a book value of $118,000 to Mark Company. Mark signed a $180,000 non-interest-bearing note, payable in three $60,000 annual installments on December 31, 2013, 2014, and 2015. The fair value of the machinery was $149,211.12 on the date of sale. The machinery had been purchased by Lisa at a cost of $160,000.

Required:

1. Prepare all the journal entries on Lisa's books for January 1, 2013, through December 31, 2015.

2. Prepare the notes receivable portion of Lisa's balance sheet on December 31, 2013 and 2014.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...