On July 1, 2025, Sheridan Inc. made two sales. 1. 2 It sold land having a fair value of $919,890 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,447,460. The land is carried on Sheridan's books at a cost of $599,700. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $404,320 (interest payable annually). Sheridan 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. Record the two journal entries that should be recorded by Sheridan Inc. for the sales transactions above that took place on July 1, 2025. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Date Account Titles and Explanation 1 July 1, 2025 Debit Credi 2 July 1, 2025
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Beautiful, Inc. Balance Sheet December 31, 2018 Cash: $425,621 Accounts Receivable: $1,654,887 Note Receivable: $900,000 Received on 2/1/2018 in return for a large service contract Terms = no interest - 3 payments of 300,000 each Feb Building (net): $1,800,000 Being used for normal operations Construction: $600,000 Weighted Average expenditures 375,000 to add in capitalized interest - started and completed in 2018 Equipment (net): $637,000 No change in use Idle Equipment (net): $107,000 Used equipment dealer quoted $82,000 - original cost $450,000 Broadcast License (net): $1,423,000 10 year remaining life but changes to the broadcast spectrum Company saves on royalties for using the broadcast spectrum on contract Without the broadcast license the royalties would be 126,000 per year Total Assets: $7,547,508 Accounts Payable: $1,067,450 Line of credit for construc: $300,000 Interest rate is 7% Note Payable: $432,370 Borrowed 500,000 on January 1, 2016 with monthly payments for 15 years at 6% Bond payable: $500,000 Sold on January 1, 2010 at face value - interest only payments Coupon rate of 5.5% paid semi annually until January 1, 2030 Total Liabilities: $2,299,820 Paid In Capital: $4,000,000 Retained Earnings: $1,247,688 $7,547,508 Beautiful wants to report all possible amounts using fair value as possible under U.S. GAAP - that means the note and bond payable The current interest rate for Beautiful is 7%. Required: 1. Show all journal entries needed to adjust to fair value where necessary. 2. Show the new balance sheet with fair value as indicated. 3. Show the journal entry to record the trade in of the idle equipment for new equipment (sticker price $105,000) plus payment of $10,000 to the equipment dealer. So you gave up the old equipment and cash for new equipment on March 1, 2019
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