De Klerk Ltd enters into a contract to sell rugby balls to Pollard Ltd for $600,000. The agreement requires Pollard Ltd to pay for these goods by four equal installments, the first installment being required on delivery and the remainder to be paid by equal installments every 6 months (i.e., 30/6, 31/12). The rugby balls are delivered to Pollard Ltd on 1 January 2021. De Klerk Ltd determines that an appropriate discount rate for interest on this transaction is 8% per annum or 3.923% per half year.

Required

Prepare the journal entries required by De Klerk Ltd to record these transactions on: 

1. 1 January 2021; 

2. 30 June 2021.

Answer rating: 100% (QA)

Contract Price 600000 Payment Terms Four Equal Installments Payment per installment 6000004 150000 p... View the full answer