On january 1, year 1, sam co. entered into a contract with a customer to sell a machine for two annual payments of $144,049 starting at the end of year 1. the customer obtains control of the machine at contract inception. the cash selling price of the machine is $250,000. sam determined that (1) the contract includes a significant financing component and (2) the contract includes an implicit interest rate of 10%. what amounts of revenue and interest income from this contract, if any, were recognized by sam in year 2?

interest revenue 13,095.1

Explanation:

We will calcualte the loan interest:

first year

machine value x interest rate = interest revenue first year

250,000 x 10% = 25,000 interest revenue for the first year

cuota - interest = amortization

144,049 - 25,000 = 119.049‬ amortization

carrying value

250,000 - 119,049 = 130.951‬

second year

carrying value x interest

130,951 x 10% = 13,095.1 interest revenue for the second year

amortization

144,049 - 13,095.1 = 130.953,9

For the second year, the interest revenue will be of 13,095.1

2b2t

explanation:

2b2t