On July 1, 2012, Rentoul Inc. made two sales. 1. It sold land having a fair value

Question:

On July 1, 2012, Rentoul Inc. made two sales.
1. It sold land having a fair value of $900,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,416,163. The land is carried on Rentoul’s books at a cost of $590,000.
2. It rendered services in exchange for a 3%, 8-year promissory note having a of $400,000 (interest payable annually). Rentoul Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Instructions
Record the two journal entries that should be recorded by Rentoul Inc. for the sales transactions above that took place on July 1, 2012.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...