On August 2, 2016, Alpha Company made a lump sum purchase of land, building, and equipment. The following were the appraised values of each element:

PP&E Element Amount

Land $10,000

Building 20,000

Equipment 30,000

Alpha signed a 3 years, 5%, note in the amount of $72,000 for the lump sum purchase. Use this information to prepare the General Journal entry (without explanation) for August 2. If no entry is required then write “No Entry Required.”

Even though the appraisal is lower than the purchase, I would ignore it? With the 5%, I have it as $3,600 or $72,000 x .05.