Manufacturer M, a large equipment manufacturer, enters into a contract to sell Product A to Customer C
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Manufacturer M, a large equipment manufacturer, enters into a contract to sell Product A to Customer C for an upfront cash payment of € 300,000. Upon signing the contract, Manufac-turer M expects to deliver Product A to Customer C in two years' time. The performance obli-gation will be satisfied at a point in time. Manufacturer M's borrowing rate is 10% (the rate that would be used in a separate financing transaction).
Manufacturer M concludes that the contract contains a significant financing component.
What are the journal entries to record?
Related Book For
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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