Question: On January 1, 2016, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring

On January 1, 2016, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2018. The effective interest rate is 8%.
Required:
1. Flow much sales revenue would Wright recognize on January 1, 2016, for this transaction?
2. Prepare journal entries to record the sale of merchandise on January 1, 2016 (omit any entry that might be required for the cost of the goods sold), the December 31, 2016, interest accrual, the December 31, 2017, interest accrual, and receipt of payment of the note on December 31, 2018.

Step by Step Solution

★★★★★

3.47 Rating (177 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Requirement 1 Sales revenue present value of the note receivable 515000 079383 408822 Present va... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1006-B-C-A-C-B-A-M (1039).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!

On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $515,000 by Elmira on December 31,...

On June 30, 2011, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of...

On June 30, 2018, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of...

The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther from residential areas. Tinsley carried the land at its original cost...

Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is...

QUESTION 6 JUL_0004_100 _=_2366226_1&step=r On June 30, 2016, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest bearing note with an...

On January 1, 2016, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $515,000 by Elmira on December 31,...

Exercise 7-20 (Algo) Long-term notes receivable [LO7-7) On January 1, 2021. Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note...

On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $523,000 by Elmira on December 31,...

On January 1, 2021. Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $529,000 by Elmira on December 31,...

LaBouche Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash payment of $2,400 received in advance. Prepare LaBouches November 1...

Columbia Products produced and sold 1,200 units of the company's only product in March. You have collected the following information from the accounting records: Sales price (per unit) Manufacturing...

9.30 Refer to Exercises 9.28 and 9.29. Using that context as an example, define in your own words what is meant by a sampling distribution of the sample mean.

What are the channels through which banks can fund their lending? In the model presented in this chapter, can banks influence the level of aggregate demand in the economy?

You are a part-time financial advisor. A client is considering an investment in common stock of a waste recycling firm. One motivation is a rumor the client heard that the company made huge...

You are a new staff accountant with a large regional CPA firm, participating in your first audit. You recall from your auditing class that CPAs often use ratios to test the reasonableness of...

13. A land investor owes $350,000 on a loan for a piece of lakefront property. If the interest accrual loan was financed with a 4-year term at 7.5% per annum, compounded quarterly, what is the...

PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $5.2 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Beta Investment $...

Instructions: Case Study Requirements The team has been instructed to select a bank that operates within the Caribbean Region. The team needs to describe and assess three banking services that the...