Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to

Question:

Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $42,400 (an imputed interest rate of 6%).

Instructions

a. Prepare the journal entry for Cramer for the receipt of cash from Enyart on July 1, 2020.

b. Prepare any other necessary journal entries for Cramer in 2020.

c. Prepare the journal entries for Cramer when the machinery is repurchased on June 30, 2021.

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Related Book For answer-question

Intermediate Accounting Volume 1

ISBN: 978-1119496496

12th Canadian edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

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Question Posted: Nov 29, 2019 10:05 AM

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Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to

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a In this case due to the agreement to repurchase the equipment Cramer continues ...View the full answer

Intermediate Accounting Volume 1

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