On January 1, 2022, Quadra Limited (a company listed on the TSX stock exchange) delivered a machine to a customer that cost $50,000 to produce. The payment terms of the sale were as follows: . A down payment of $12,000 was paid by the customer at the time of delivery; . A promissory note was issued at the time of delivery. The note had a face value of $80,000 and a stated interest rate of 3% per annum, payable each December 31. The promissory note had a maturity date of December 31, 2024. The market rate of interest for a similar note would have been 8%. 

REQUIRED 

1. Assuming revenue was properly recognized on January 1, 2022, prepare the journal entry or entries that would have been recorded on January 1, 2022. Quadra uses the gross method to account for promissory note. Show your work. 

2. Assume that it is appropriate to recognize interest income on December 31, 2022. Prepare the journal entry or entries to record the coll.

Answer rating: 100% (QA)

Quadra Limited Journal Entries 1 Revenue Recognition and Promissory Note January 1 2022 Since Quadra uses the gross method the entire sale price is re... View the full answer