On January 1, 2020 Cars V Us sold a fleet of cars to a car rental...
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On January 1, 2020 Cars V Us sold a fleet of cars to a car rental company accepting a 2%, 5-year note requiring interest payments at the end of each year. Cars V Us received a $30,500.00 down payment and a note with a face value of $396,500.00 in exchange for the cars. The cars had a cost of $335,500. A reasonable borrowing rate of 10% should be used. Prepare the journal entries to record the sale and 2020 and 2021 year end adjusting entries: (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor value calculations to 5 decimal places, e.g. 0.52755. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation 1/1/2020 + Cash Notes Receivable Sales Revenue Discount on Notes Receivable 12/31/20 12/31/21 (To record the sale) Cost of Goods Sold Inventory (To record the cost) Cash Discount on Notes Receivable Interest Revenue Cash Discount on Notes Receivable Interest Revenue Debit 30500 396500 335500 Credit 276256.24 150743.76 335500 On January 1, 2020 Cars V Us sold a fleet of cars to a car rental company accepting a 2%, 5-year note requiring interest payments at the end of each year. Cars V Us received a $30,500.00 down payment and a note with a face value of $396,500.00 in exchange for the cars. The cars had a cost of $335,500. A reasonable borrowing rate of 10% should be used. Prepare the journal entries to record the sale and 2020 and 2021 year end adjusting entries: (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor value calculations to 5 decimal places, e.g. 0.52755. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation 1/1/2020 + Cash Notes Receivable Sales Revenue Discount on Notes Receivable 12/31/20 12/31/21 (To record the sale) Cost of Goods Sold Inventory (To record the cost) Cash Discount on Notes Receivable Interest Revenue Cash Discount on Notes Receivable Interest Revenue Debit 30500 396500 335500 Credit 276256.24 150743.76 335500
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Solution Date Account Titles and Explanation Debit Credit 112020 Cash 30500 Notes ... View the full answer
Related Book For
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
Posted Date:
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