On October 31, 2021, XYZ Corporation (an equipment manufacturer) sold equipment that cost $150,000 ABC Company (a construction company). The agreement stipulated that ABC would make five payments of $60,000 (including interest) annually on October 31. The first note payment is to be made on October 31, 2021. Assuming that a prevailing interest rate of 6% applies to this contract: Future Value of 1: 1.33823 Present Value of 1: .74726 Future Value of an Ordinary Annuity: 5.63709 Present Value of an ordinary annuity: 4.21236 Present Value of an Annuity Due: 4.46511 n=5, interest rate = 6% 

Part A: Prepare the journal entry for XYZ to record sale of the equipment on 10/31/21. 

Part B: Prepare the journal entry(s) for XYZ for year ended 12/31/22, if any, associated with this sale of the equipment 

Part C: Prepare the entry for the receipt of payment on 10/31/2022 for XYZ if the company does not use reversing entries. 

Part D: Prepare the journal entry for ABC to record the purchase of the equipment on 10/31/21.

 Part E: For XYZ Corporation, indicate the dollar amounts associated with the note receivable to be reported as current assets and as long term investments on a classified balance sheet at December 31, 2023. 

Part F: What is the impact on XYZ Corporations' net income for the year ending 12/31/21 given a 20% tax rate for this transaction? 

Answer rating: 100% (QA)

Part A Journal entry for XYZ to record sale of the equipment Date Account Debit Credit 103121 Cash 1... View the full answer