Question

[Ⅱ]Lauder Company has found itself in financial difficulty and has decided to enter into an agreement...

[Ⅱ]Lauder Company has found itself in financial difficulty and has decided to enter into an agreement with a creditor to transfer a piece of land to the creditor in exchange for a $200,000 note payable with $10,000 accrued interest. The land, which originally cost $100,000, has a current fair value of $150,000, but is expected to increase in value to $200,000 within the next year.

               A. Prepare the journal entries on Lauder Company’s books to record the transfer of the land.

              

      

   

      

       

B. Assuming the fair value of the land was $250,000, repeat the requirement in (A).

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