Note Issued for Non-Cash Consideration on July 1, 2014, Modesto

Essay

Note issued for non-cash consideration On July 1, 2014, Modesto Holdings Ltd.issued a $50,000 face value note due June 30, 2017 with a stated interest rate of 4% to Modern Consultants in return for consulting services provided in 2014.The value of the consulting services is not readily determinable and the note is not readily marketable.On the basis of a credit analysis, a reasonable imputed interest rate would be 12%. Instructions Prepare the journal entry to record the issuance of the note by Modesto.Use your calculator and round values to the nearest dollar.