Monroe Corporation sold a building to Fast Company on 7/1/2020 in return for annual payments of $500,000
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| Monroe Corporation sold a building to Fast Company on 7/1/2020 in return for annual payments of $500,000 dollars starting on the day of the sale and on 7/1 for each of the next nine years (10 total payments). Monroe bought the building on 7/1/2018 for $4,200,000 and had assumed a life of 20 years and an estimated salvage values of $1,200,000. Monroe update the depreciation account on 6/30/2020. | |||||||||
| All parties agree that 6% is a reasonable rate of interest for Fast Company. Monroe records discounted notes receivable at present value on the date or origination. | |||||||||
| Required: Record Monroe's journal entry on the date of sale and Monroe's 12/31/2020 adjusting entry to record interest revenue for 2020. | |||||||||
| Dr. | Cr. | ||||||||
| Cash | 500000 | ||||||||
| Note Receivable at NPV | |||||||||
| Accumulated Depreciation | |||||||||
Expert Answer:
The Journal entries on date of sale 01072020 and adjusting entry to record Interest Revenue on ... View the full answer
Related Book For 
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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