Below are descriptions about three notes receivable owned by Alistar
Notes receivable 1:
The $400,000 note receivable is dated December 31, 2021, bears interest at 8%, and is due on December 31, 2025. The note is due from Flame May, president of Alistar Inc. Interest is payable annually on December 31, and all interest payments were paid on their due dates through December 31, 2023.
Notes receivable 2:
On April 1, 2022, Alistar sold a patent to Pennsylvania Company in exchange for a $100,000 zero-interest-bearing note due on April 1, 2024. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at April 1, 2022, was 12%. The patent had a carrying value of $40,000 at January 1, 2022, and the amortization for the year ended December 31, 2022, would have been $8,000. The collection of the note receivable from Pennsylvania is reasonably assured.
Notes receivable 3:
On September 1, 2022, Alistar sold a parcel of land to Yakult Company for $200,000 under an installment sale contract. Yakult made a $60,000 cash down payment on September 1, 2022, and signed a 4-year 11% note for the $140,000 balance. The equal annual payments of principal and interest on the note will be $45,125 payable on September 1, 2023, through September 1, 2026. The land could have been sold at an established cash price of $200,000. The cost of the land to Alistar was $150,000. Circumstances are such that the collection of the installments on the note is reasonably assured
Do the following instructions for Alistar:
1. Prepare journal entry on December 31, 2022 for all notes receivable
2. Compute revenues and expenses (if any) for the year of 2022 and 2023
3. Prepare the receivable section of Statement of Financial Position at the end of year 2023
Show your computation