$10.00 P7-8 (Notes Receivable with Realistic Interest Rate)ISBN: 9780470374
Book Title: Intermediate Accounting
Book Author: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield,
Found in Business: Accounting
Chapter 7, # 0
P7-8 (Notes Receivable with Realistic Interest Rate) On October 1, 2010, Arden Farm Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of cash payment Valco Borthers Farm gave Arden a 2-year, $120,000, 8% note (a realistic rate of interest for a note of this type). The note required interest to be paid annually on October 1. Arden’s financial statements are prepared on a calendar-year basis.
Assuming Valco Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for Arden Farm Equipment Company for the entire term of the note
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