Enco Dynamics Purchased a Tract of Land from Spectrum Associates

question 88

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.

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