E7-18B (Note Transactions at Unrealistic Interest Rates) On July 1 2014 Taylor Inc. made two sales.1. It sold land having a fair market value of $500000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $732053.70. The land is carried on Taylors books at a cost of $375000.2. It rendered services in exchange for a 4% 8-year promissory note having a face value of $400000 (interest payable annually).Taylor Inc. recently had to pay 7% interest for money that it borrowed from British National Bank. Thecustomers in these two transactions have credit ratings that require them to borrow money at 10% interest.InstructionsRecord the two journal entries that should be recorded by Taylor Inc. for the sales transactions above that took place on July 1 2014.
