Entry required:
1: record the purchase of land in situation A.
2: record the interest expense at year end for situation A.
3: Record the purchase of office equipmment in situation B.
4: Record the interest expense at year end for situation B.
5: Record the purchase of the building in situation C.
6: Record the interest expense at year end for situation C.
At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) A The company issued a two-year, 1096, $680,000 note in exchange for a tract of land. The current market rate of interest is 10%. B. Lambert acquired some office equipment with a fair value of $133,636 by issuing a one-year, $140,000 note. The stated interest on the note is 5% C. The company purchased a building by issuing a three-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence. The current market rate of interest is 10%. Required: Prepare the journal entries to record each of the three transactions and the interest expense at the end of the first year for each. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field. Do not round intermediate calculations. Enter your answers in whole dollar.)
