On May 31, 2019, John Deere sold a tractor to Dirtco in exchange for a 2-year, $440,000 non-interest-bearing note. Dirtco will make a $100,000 payment on May 31, 2020, and pay a lump sum payment of 340,000 on May 31, 2021. John Deere's year-end is December 31. Assume that your year-end adjusting entries are reversed. Do not show the reversal entry. If you do not know what a reversing journal entry is, it is important that you find out before doing this question. Dirtco would normally pay an interest rate of 6%. Required Prepare all journal entries required for the note for John Deere, from the initial sale to repayment. Count exact days for the year-end interest revenue adjustment. Calculate and journalize amounts to the nearest dollar. Please break down all your calculations.

On May 31, 2019, John Deere sold a tractor to Dirtco in exchange for a 2-year, $440,000 non-interest-bearing note. Dirtco will make a $100,000 payment on May 31, 2020, and pay a lump sum payment of 340,000 on May 31, 2021. John Deere's year-end is December 31. Assume that your year-end adjusting entries are reversed. Do not show the reversal entry. If you do not know what a reversing journal entry is, it is important that you find out before doing this question. Dirtco would normally pay an interest rate of 6%. Required Prepare all journal entries required for the note for John Deere, from the initial sale to repayment. Count exact days for the year-end interest revenue adjustment. Calculate and journalize amounts to the nearest dollar. Please break down all your calculations.

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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