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Calgary Developments Inc. sold a parcel from its inventory of land to Larson Corporation on...

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Accounting

Calgary Developments Inc. sold a parcel from its inventory of land to Larson Corporation on June 1,
2022. In exchange, Larson Corporation signed a 4-year promissory note with annual interest payments. Other information pertaining to this transaction follows:
8 marks
Cost of the land to Calgary Developments Inc. $ 45,191
Face value of the note $ 130,200
Larson Corporation typically borrows funds at the following rate 8%
The promissory note requires annual interest payments at the following rate 10%
Larson Corporation will make interest payments on May 31 of each year. Calgary Developments follows IFRS and has a year end of May 31.
Required:
1. Calculate the present value of the note and prepare the journal entries for Calgary
Developments to account for the sale of the land. (4 marks)
2. Prepare an amortization schedule for the note. (2 marks)
3. Prepare journal entries for Calgary Developments on May 31,2026.(2 marks)

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