On September 1, 2023, Kingbird, Inc. sold goods to Ayayai Corp., a new customer. Before shipping the goods, Kingbird's credit and collections department conducted a credit check and determined that Ayayai is a high credit-risk customer. As a result, Kingbird did not provide Ayayai with open credit by recording the sale as an account receivable. Instead, Kingbird required Ayayai to provide a non-interest-bearing promissory note for $32,700 face value, to be repaid in one year. Ayayai has a credit rating that requires it to pay 9% interest on borrowed funds. Kingbird pays 7% interest on a loan recently obtained from its local bank. Kingbird has a December 31 year end and follows IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. (a) Prepare the entries required on Kingbird's books to record the sale, annual adjusting entry, and collection of the note's full face
On September 1, 2023, Kingbird, Inc. sold goods to Ayayai Corp., a new customer. Before shipping the goods, Kingbird's credit and collections department conducted a credit check and determined that Ayayai is a high credit-risk customer. As a result, Kingbird did not provide Ayayai with open credit by recording the sale as an account receivable. Instead, Kingbird required Ayayai to provide a non-interest-bearing promissory note for $32,700 face value, to be repaid in one year. Ayayai has a credit rating that requires it to pay 9% interest on borrowed funds. Kingbird pays 7% interest on a loan recently obtained from its local bank. Kingbird has a December 31 year end and follows IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. (a) Prepare the entries required on Kingbird's books to record the sale, annual adjusting entry, and collection of the note's full face
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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