factor(s) from the tables provided.) Required: 1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. 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, 2021. 3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for Arctic to record the sale on January 1, 2021. 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 $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. (If no entry is required for a transaction/event, select "No inurnal entnu
factor(s) from the tables provided.) Required: 1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. 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, 2021. 3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for Arctic to record the sale on January 1, 2021. 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 $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. (If no entry is required for a transaction/event, select "No inurnal entnu
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 14EB: Anderson Air is a customer of Handler Cleaning Operations. For Anderson Airs latest purchase on...
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Question
![Exercise 6-12 (Algo) Time value of money for accounts receivable [LO6-6]
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2021, and Arctic
received a note from Seneca indicating that Seneca will pay Arctic $43,500 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 9%. (FV of
$1, PV of $1, FVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal
entry for Arctic to record the sale on January 1, 2021.
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, 2021.
3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for
Arctic to record the sale on January 1, 2021.
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 $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic
to record the sale on January 1, 2021.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final
answers to the nearest whole dollar amount.)
Answer is complete but not entirely correct.
No
Date
General Journal
Debit
Credit
1
January 01, 2021 Notes receivable
43,500
Discount on notes receivable
2,071 8
41,429 X
Sales revenue
December 31, 202 Cash
43,500
Discount on notes receivable
2,071
Notes receivable
43,500
Interest revenue
2,071 X
3
January 01, 2021 Notes receivable
43,500
000 0
O 00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e1bfd6a-3cb6-4031-858f-4ba8da8545b1%2F593fd11c-074c-4530-a1d4-07f8d2ddc7a1%2Fusdc5km_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 6-12 (Algo) Time value of money for accounts receivable [LO6-6]
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2021, and Arctic
received a note from Seneca indicating that Seneca will pay Arctic $43,500 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 9%. (FV of
$1, PV of $1, FVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal
entry for Arctic to record the sale on January 1, 2021.
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, 2021.
3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for
Arctic to record the sale on January 1, 2021.
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 $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic
to record the sale on January 1, 2021.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final
answers to the nearest whole dollar amount.)
Answer is complete but not entirely correct.
No
Date
General Journal
Debit
Credit
1
January 01, 2021 Notes receivable
43,500
Discount on notes receivable
2,071 8
41,429 X
Sales revenue
December 31, 202 Cash
43,500
Discount on notes receivable
2,071
Notes receivable
43,500
Interest revenue
2,071 X
3
January 01, 2021 Notes receivable
43,500
000 0
O 00
![1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal
entry for Arctic to record the sale on January 1, 2021.
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, 2021.
3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for
Arctic to record the sale on January 1, 2021.
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 $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic
to record the sale on January 1, 2021.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final
answers to the nearest whole dollar amount.)
X Answer is complete but not entirely correct.
No
Date
General Journal
Debit
Credit
1
January 01, 2021 Notes receivable
43,500 O
Discount on notes receivable
2,071 X
Sales revenue
41,429 X
December 31, 202 Cash
43,500
Discount on notes receivable
2,071 X
Notes receivable
43,500
Interest revenue
2,071 X
3
January 01, 2021 Notes receivable
43,500 O
Discount on notes receivable
4,044 X
Sales revenue
39,456 X
4
January 01, 2021 Notes receivable
43,500 O
Sales revenue
43,500
O O0
O O0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e1bfd6a-3cb6-4031-858f-4ba8da8545b1%2F593fd11c-074c-4530-a1d4-07f8d2ddc7a1%2F4zguvw8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal
entry for Arctic to record the sale on January 1, 2021.
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, 2021.
3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for
Arctic to record the sale on January 1, 2021.
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 $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic
to record the sale on January 1, 2021.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final
answers to the nearest whole dollar amount.)
X Answer is complete but not entirely correct.
No
Date
General Journal
Debit
Credit
1
January 01, 2021 Notes receivable
43,500 O
Discount on notes receivable
2,071 X
Sales revenue
41,429 X
December 31, 202 Cash
43,500
Discount on notes receivable
2,071 X
Notes receivable
43,500
Interest revenue
2,071 X
3
January 01, 2021 Notes receivable
43,500 O
Discount on notes receivable
4,044 X
Sales revenue
39,456 X
4
January 01, 2021 Notes receivable
43,500 O
Sales revenue
43,500
O O0
O O0
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