Business, 16.03.2020 21:28 alexwlodko

On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $534,000 by Elmira on December 31, 2023. The effective interest rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):1. How much sales revenue would Wright recognize on January 1, 2020, for this transaction?2. Prepare journal entries to record the sale of merchandise on January 1, 2020 (omit any entry that might be required for the cost of the goods sold), the December 31, 2020, interest accrual, the December 31, 2021, interest accrual, and receipt of payment of the note on December 31, 2022Required 1: How much sales revenue would Wright recognize on January 1, 2018, for this transaction? (Round your final answer to nearest whole number.)
ales revenue
Required 2: - Record the sale of goods on January 1, 2018 in exchange for the long term note.
- Record the interest accrual on December 31, 2018.
- Record the interest accrual on December 31, 2019.
- Record the interest revenue in 2020 and collection of the note..

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Answer from: gabypinskyb8045

Solution:

1. (i)

Sales revenue = Present value of the note receivable

= $528,000 x .86384 = $456,108

Present value of $1: n = 3, i = 5% (PV of $1)

(ii)

December 31, 2018:

Interest revenue: ($456,108 x 5%) = $22,805

December 31, 2019:

Interest revenue: (($456,108 + $22,805) x 5%) = $23,946

December 31, 2020:

Interest revenue: (($456,108 + $22,805 + $23,946) x 5%) = $25,143

2. Journal entries to record the sale of merchandise on January 1, 2020

Date General Journal Debit Credit.

Jan 01, 2018 Note receivable 528,000

Discount on note receivable 71,892

Sales revenue 456,108

Dec 31' 2018 Discount on note receivable 22,805

Interest revenue 22,805

Dec 31, 2019 Discount on note receivable 23,946

Interest revenue 23,946

Dec 31' 2020 Cash 528,000

Discount on note receivable 25,143

Interest revenue 25,143

Note receivable 528,000

Answer from: Quest

Answer(b)make your sale on the first,second,or third call,;

Answer from: Quest

Spansion architecture;

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On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchan...

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