Company A sold inventory on January 2, 2021, on the following terms: The interest of 3% is
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Question:
Company A sold inventory on January 2, 2021, on the following terms:
The interest of 3% is payable on December 31 of each year for four years with the principal amount of $2,250,000 payable on December 31, 2024. The cash price of the inventory would have been $1,980,000. The entry to record the transaction was to debit Notes Receivable and credit revenue the $2,250,000. The interest payment of $67,500 was received on December 31 and credited to revenue.
Required:
Prepare the adjusting journal entries to adjust the notes receivable/revenue account on December 31, 2021.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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