On July 1 2008 Agincourt Inc made two sales 1

On July 1, 2008, Agincourt Inc. made two sales. 1. It sold land having a fair market value of
$700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of
$1,101,460. The land is carried on Agincourt’s books at a cost of $590,000.2. It rendered
services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest
payable annually).Agincourt 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(a) Record the two journal entries that should
be recorded by Agincourt Inc. for the sales transactions above that took place on July 1, 2008.
(Round to the nearest dollar.)(b) Assume that Agincourt uses the fair value option for the note
issued in exchange for the land. Prepare the entry at December 31, 2008, if the fair value of the
note is $720,000.View Solution:
On July 1 2008 Agincourt Inc made two sales 1
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