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Enco Dynamics Purchased a Tract of Land from Spectrum Associates

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Essay

Enco Dynamics purchased a tract of land from Spectrum Associates on July 1,2010,by issuing a 5-year noninterest-bearing note with a face value of $150,000.Enco has a June 30 fiscal year end and normally pays a 12% rate of interest on similar notes payable balances.Prepare the journal entry to record the acquisition of the land and any other journal entries required relative to the note in the fiscal years ended June 30,2011 and 2012.Show how the note would appear on Enco's June 30,2011 balance sheet.


Definitions:

Opiates

A group of narcotics derived from the opium poppy that provide a euphoric rush and depress the nervous system.

Opium Poppy

A flowering plant from which opium and many opiates, including morphine and codeine, are derived.

Narcotics

Drugs used to relieve pain and induce sleep; the term is usually reserved for opiates.

Euphoric Rush

A sudden, intense feeling of happiness, excitement, or well-being often experienced spontaneously or as a result of certain stimuli or activities.

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