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 Arcticreceived a note from Seneca indicating that Seneca will pay Arctic $43,500 on a future date. Unless informed otherwise, assume thatArctic 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 journalentry 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 onDecember 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 forArctic 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 thenote indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arcticto 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 finalanswers to the nearest whole dollar amount.)Answer is complete but not entirely correct.NoDateGeneral JournalDebitCredit1January 01, 2021 Notes receivable43,500Discount on notes receivable2,071 841,429 XSales revenueDecember 31, 202 Cash43,500Discount on notes receivable2,071Notes receivable43,500Interest revenue2,071 X3January 01, 2021 Notes receivable43,500000 0O 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 journalentry 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 onDecember 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 forArctic 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 thenote indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arcticto 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 finalanswers to the nearest whole dollar amount.)X Answer is complete but not entirely correct.NoDateGeneral JournalDebitCredit1January 01, 2021 Notes receivable43,500 ODiscount on notes receivable2,071 XSales revenue41,429 XDecember 31, 202 Cash43,500Discount on notes receivable2,071 XNotes receivable43,500Interest revenue2,071 X3January 01, 2021 Notes receivable43,500 ODiscount on notes receivable4,044 XSales revenue39,456 X4January 01, 2021 Notes receivable43,500 OSales revenue43,500O O0O O0

Journal entries refers to the official book of a company which is used to record the day to day…

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

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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