Modern Engineering (ME) entered into a contract for 3-year maintenance services with a manufacturing concern. Same service will be rendered over 3-year period. Contract required 100% upfront fees of Rs. 300,000 payable at the time of agreement on January 1, 2018. Prevailing market interest rate for ME is 12 %. ME prepares its financial statements on 31st December every year. Required: All journal entries for above transaction.

Modern Engineering (ME) entered into a contract for 3-year maintenance services with a manufacturing concern. Same service will be rendered over 3-year period. Contract required 100% upfront fees of Rs. 300,000 payable at the time of agreement on January 1, 2018. Prevailing market interest rate for ME is 12 %. ME prepares its financial statements on 31st December every year. Required: All journal entries for above transaction.

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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