On January 1, 2017, the Porter Corporation issued a five-year, non-interest-bearing, $44,000 note to Longshore Corporation in

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On January 1, 2017, the Porter Corporation issued a five-year, non-interest-bearing, $44,000 note to Longshore Corporation in exchange for used equipment. Neither the fair market value of the equipment nor that of the note is determinable. The incremental borrowing rate of Porter is 12% and the incremental borrowing rate of Longshore is 10%.

a. Prepare the journal entry to record the issuance of the note by Porter on January 1, 2017.

b. Prepare the journal entry to record the interest expense on December 31, 2017.

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Accounting Tools for Business Decision Making

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Posted Date: Jan 12, 2021 01:11 AM

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On January 1, 2017, the Porter Corporation issued a five-year, non-interest-bearing, $44,000 note to Longshore Corporation in

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Introduction Note amount 44000 Porter Incremental borrowing rate 12 Longshore Inc... View the full answer

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