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Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $42,400 (an imputed interest rate of 6%). Instructions a.    Prepare the journal entry for Cramer for the transfer of the asset to Enyart on July 1, 2020. b.    Prepare any other necessary journal entries for Cramer in 2020. c.    Prepare the journal entry for Cramer when the machinery is repurchased on June 30, 2021.

Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $42,400 (an imputed interest rate of 6%). Instructions a.    Prepare the journal entry for Cramer for the transfer of the asset to Enyart on July 1, 2020. b.    Prepare any other necessary journal entries for Cramer in 2020. c.    Prepare the journal entry for Cramer when the machinery is repurchased on June 30, 2021.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $42,400 (an imputed interest rate of 6%).

Instructions

a.    Prepare the journal entry for Cramer for the transfer of the asset to Enyart on July 1, 2020.

b.    Prepare any other necessary journal entries for Cramer in 2020.

c.    Prepare the journal entry for Cramer when the machinery is repurchased on June 30, 2021.

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