On January 1, 2017, Cheyenne Co. sells property for which it had paid $674,800 t

Question

On January 1, 2017, Cheyenne Co. sells property for which it had paid $674,800 to Sargent Company, receiving in return Sargent’s zero-interest-bearing note for $1,000,000 payable in 5 years. What entry would Cheyenne make to record the sale, assuming that Cheyenne frequently sells similar items of property for a cash sales price of $628,000? (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Jan. 1

Explanation / Answer

Journal entry to record the sale of property will be:

Date Particulars L.F Amount ($) Amount ($) 2017 Jan-01 Note Receivable 1,000,000    Discount on notes receivable 372,000    Building 628,000 (For property sold against note receivable)

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