On January 1, 2017 Chester sold land to Melissa's Company, accepting a 3-year $75,000 non-interest-bearing note due in three equal installments of $25,000 beginning December 31, 2017. The land had a book value of $55,000, the fair value for the land was not determinable. An appropriate interest rate for a note of this caliber is 9%.
Required:
Prepare the journal entries on Chester's books to record:
1) the sale
2) the annual interest income and receipt of each $25,000 installment

Question

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The Answer of On January 1, 2017 Chester sold land to Melissa's Company, accepting a 3-year $75,000 non-interest-bearing note due in three equal installments of $25,000 beginning December 31, 2017. The land had a book value of $55,000, the fair value for the land was not determinable. An appropriate interest rate for a note of this caliber is 9%.
Required:
Prepare the journal entries on Chester's books to record:
1) the sale
2) the annual interest income and receipt of each $25,000 installment

On January 1, 2017 Chester Sold Land to Melissa's Company