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Liabilities and Equity Exercises II

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On October 1, 20X4, River Woods purchased land by giving $200,000 in cash and executing a $800,000 note payable to the former owner. The note bears interest at 8% per annum, with interest being payable annually on September 30 of each year. Rojas is also required to make a $200,000 payment toward the note’s principal on every September 30. a) Prepare the appropriate journal entry to record the land purchase on October 1, 20X4. b) Prepare the appropriate journal entry to record the year-end interest accrual on December 31, 20X4. c) Prepare.

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