Transcribed Image Text: P7-8 )(Notes Receivable with Realistic Interest Rate) On October 1, 2015, Arden Farm Equipment Com- pany sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu

Transcribed Image Text: P7-8 )(Notes Receivable with Realistic Interest Rate) On October 1, 2015, Arden Farm Equipment Com-
pany sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of a cash payment Valco Brothers
Farm gave Arden a 2-year, $120,000, 8% note (a realistic rate of interest for a note of this type). The note required
interest to be paid annually on October 1. Arden’s financial statements are prepared on a calendar-year basis.
Instructions
Assuming Valco Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for
Arden Farm Equipment Company for the entire term of the note.

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