On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for thebuses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2020. The effectiveinterest rate is 8%.Required:1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might berequired for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019,interest accrual, and receipt of payment of the note on December 31, 2020.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for the
buses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2020. The effective
interest rate is 8%.
Required:
1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?
2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might be
required for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019,
interest accrual, and receipt of payment of the note on December 31, 2020.

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