Question

"journal form for Sanford SA. Unrealistic Interest Rates) On July 1, 2019, Rentoul ple made Instructions Prepare all necessary entries in general journal form o E7.13 (L04) Notes Transactions at Unrealistic Inte Two sales. 1. It sold land having a fair value of £900,000 in exchange for issory note in the face amount of £1,410, £590,000. 2. It rendered services in exchange for a 3,0 (interest payable annually). * £900,000 in exchange for a 4-year, zero-interest-bearing prom- amount of £1,416,163. The land is carried on Rentoul's books at a cost of exchange for a 3%, 8-year promissory note having a face value of £400,000 The customers in these two transactions have crear interest. cently had to pay 8% interest for money that it borrowed from British National Bank. mese fwo transactions have credit ratings that require them to borrow money at 12% Instructions Record the two journal entries that should be recorded by Rentoul ple for the sales transactions above that took place on July 1, 2019.

Answer 1

1.land (asset) account Dr 310000(900000-590000)

To revaluation account account 310000

(BEING LAND WAS REVALUAD AT 900000)

2.Promissory note account(zero percent interest) Dr 1416163

To land account account 900000

  To services rendered account 400000

To Interest received account   116163

(BEING ENTRY MADE FOR TRNSFER OF LAND AND PROMISSORY NOTE RECEIVED)