On July 1 2014 Agincourt Inc made two sales 1 It #1960

On July 1, 2014, Agincourt Inc. made two sales:1. It sold excess land in exchange for a four-
year, non-interest-bearing promissory note in the face amount of $1,101,460. The land's
carrying value is $590,000.2. It rendered services in exchange for an eight-year promissory note
having a face value of $400,000. Interest at a rate of 3% is payable annually.The customers in
the above transactions have credit ratings that require them to borrow money at 12%
interest.Agincourt recently had to pay 8% interest for money it borrowed from British National
Bank.3. On July 1, 2014, Agincourt also agreed to accept an installment note from one of its
customers in partial settlement of accounts receivable that were overdue. The note calls for four
equal payments of $20,000, including the principal and interest due, on the anniversary of the
note. The implied interest rate on this note is 10%.Instructions(a) Prepare the journal entries to
record the three notes receivable transactions of Agincourt Inc. on July 1, 2014.(b) Prepare an
effective-interest amortization table for the installment note obtained in partial collection of
accounts receivable. From Agincourt's perspective, what are the advantages of an installment
note compared with a non-interest-bearing note?View Solution:
On July 1 2014 Agincourt Inc made two sales 1 It

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