On August 31, 2020 ABC Inc. made a sale of equipment that has a list price of
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Question:
On August 31, 2020 ABC Inc. made a sale of equipment that has a list price of $1,900,000. The payment arrangements made with the customer are as follows: | ||||||||||||||||
the customer will pay equal annual payments over a period of 5 years at an interest rate of 2.5%. You have established that your customer’s incremental borrowing rate is 6%. | ||||||||||||||||
ABC Inc.’s incremental borrowing rate is 5%. Your year-end is December 31. Assume that ABC Inc. is a publicly accountable entity. | ||||||||||||||||
Required: prepare all journal entries relative to this transaction on your books at the following dates: | ||||||||||||||||
(a) Aug 31, 2020 | ||||||||||||||||
(b) Dec 31, 2020 | ||||||||||||||||
(c) Aug 31, 2021 |
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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