Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2024, and Arctic received a note from Seneca indicating that Seneca will pay Arctic $44,000 on a future date. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 8%. Required: 1. Assume the note indicates that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2024. Prepare the journal entry for Arctic to record the sale on January 1, 2024. 2. Assume the same facts as in requirement 1, and prepare the journal entry for Arctic to record collection of the payment on December 31, 2024. 3. Assume instead that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2025. Prepare the journal entry for Arctic to record the sale on January 1, 2024. 4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant and that the note indicates that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2024. Prepare the journal entry for Arctic to record the sale on January 1, 2024.
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2024, and Arctic received a note from Seneca indicating that Seneca will pay Arctic $44,000 on a future date. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 8%. Required: 1. Assume the note indicates that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2024. Prepare the journal entry for Arctic to record the sale on January 1, 2024. 2. Assume the same facts as in requirement 1, and prepare the journal entry for Arctic to record collection of the payment on December 31, 2024. 3. Assume instead that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2025. Prepare the journal entry for Arctic to record the sale on January 1, 2024. 4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant and that the note indicates that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2024. Prepare the journal entry for Arctic to record the sale on January 1, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2024, and Arctic
received a note from Seneca indicating that Seneca will pay Arctic $44,000 on a future date. Unless informed otherwise, assume that
Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 8%.
Required:
1. Assume the note indicates that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2024. Prepare the journal
entry for Arctic to record the sale on January 1, 2024.
2. Assume the same facts as in requirement 1, and prepare the journal entry for Arctic to record collection of the payment on
December 31, 2024,
3. Assume instead that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2025. Prepare the journal entry for
Arctic to record the sale on January 1, 2024.
4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant and that the
note indicates that Seneca is to pay Arctic the $44,000 due on the note on December 31, 2024. Prepare the journal entry for
Arctic to record the sale on January 1, 2024.
Note: Use tables, Excel, or a financial calculator. If no entry is required for a transaction/event, select "No journal entry required" in
the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. (FV
of $1. PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1)
Answer is not complete.
No
Date
General Journal
Debit
Credit
1
January 01, 2024 Notes receivable
44,000
Sales revenue
40,740
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