On January 1, 2020, Miller Inc. sells equipment to Smith Inc. for $132,000. As stipulated in...

  

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On January 1, 2020, Miller Inc. sells equipment to Smith Inc. for $132,000. As stipulated in the revenue contract, Miller Inc. will buy back the equipment on December 31, 2020, for $141,240. The relevant interest rate is 7% a. Prepare the seller's journal entry on January 1, 2020. Date Account Name Jan. 1, 2020 b. Prepare the seller's journal entry on De Date Account Name Dec. 31, 2020 To recognize interest. Dec. 31, 2020 C. Assume instead that Miller has the option to buy back the equipment and the fair value of the equipment is expected to decline through 2020. How would the answers to parts a and b change (if at all)? Date Account Name Jan. 1, 2020 Dec. 31, 2020 To recognize interest. Dec. 31, 2020 To record payment. d. Assume instead that Smith has the opt the expected market value of the equipm Date Account Name Jan. 1, 2020 Dec. 31, 2020 To record interest. Dec. 31, 2020 To record payment. uoddns On January 1, 2020, Miller Inc. sells equipment to Smith Inc. for $132,000. As stipulated in the revenue contract, Miller Inc. will buy back the equipment on December 31, 2020, for $141,240. The relevant interest rate is 7% a. Prepare the seller's journal entry on January 1, 2020. Date Account Name Jan. 1, 2020 b. Prepare the seller's journal entry on De Date Account Name Dec. 31, 2020 To recognize interest. Dec. 31, 2020 C. Assume instead that Miller has the option to buy back the equipment and the fair value of the equipment is expected to decline through 2020. How would the answers to parts a and b change (if at all)? Date Account Name Jan. 1, 2020 Dec. 31, 2020 To recognize interest. Dec. 31, 2020 To record payment. d. Assume instead that Smith has the opt the expected market value of the equipm Date Account Name Jan. 1, 2020 Dec. 31, 2020 To record interest. Dec. 31, 2020 To record payment. uoddns

Answer rating: 100% (QA)

aJanuary 1 2020 Smith Inc Dr 132000 To Sales Cr 132000 bDece... View the full answer