Required: (a) Did Troy pay Riker before or after delivery of the vehicle? (b) Prepare the journal entry Riker would make to record receipt of Troy's payment, assuming no interest revenue or interest expense had been recorded previously. (c) Prepare the journal entry Riker would make to record delivery of the vehicle, assuming no interest revenue or interest expense had been recorded previously.
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- 21 Riker receives $33,000 from Troy as payment for a vehicle that has a fair value of $43,300. The $33,000 constitutes full payment for the vehicle as specified in the sales contract. Assume that the time value of money is viewed as significant for this contract. Required: (a) Did Troy pay Riker before or after delivery of the vehicle? (b) Prepare the journal entry Riker would make to record receipt of Troy's payment, assuming no interest revenue or interest expense had been recorded previously. (c) Prepare the journal entry Riker would make to record delivery of the vehicle, assuming no interest revenue or interest expense had been recorded previously. Complete this question by entering your answers in the tabs below. Req A Req B and C Did Troy pay Riker before or after delivery of the vehicle? Troy paid Riker of the vehicle.Daniel Martin and John Duke contracted with J & S Distributors, Inc., to purchase a KIS Magnum Speed printer for $17,000. The parties agreed that Martin and Duke would send one-half of the money as a deposit and would pay the balance upon delivery. They also agreed to the following provision: In the event of non-payment of the balance of the purchase price reflected herein on due date and in the manner recorded or on such extended date which may be caused by late delivery on the part of [the seller], the Customer shall be liable for: (1) immediate payment of the full balance recorded herein; and (2) payment of interest at the rate of 12 percent per annum calculated on the balance due, when due, together with any attorney’s fees, collection charges and other necessary expenses incurred by [the seller]. When the machine arrived five days late, Martin and Duke refused to accept it, stating that the company had purchased a substitute machine elsewhere. Martin and Duke requested the…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 journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.) X Answer is complete…
- On January 1, 2019, Fulton Inc. enters into a contract with Gibson to deliver goods. Gibson pays $100,000 at the time the contract is signed, at which time the goods are transferred and Fulton’s performance obligation is complete. In addition, Gibson agrees to pay Fulton $100,000 on December 31, 2019, and December 31, 2020. If Fulton entered into a financing arrangement with Gibson it would charge an interest rate of 9%. Please assist with the journal entries. Thank you! There are 8 journal entries in all.On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $20,000 on March 31, 2022. The fair value of the merchandise exchanged is $18,500. Esquire views the financing component of this contract as significant.Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March 31, 2022 collection.2. What is the effective interest rate on the note?On June 30, 2024, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $46,000 on March 31, 2025. The fair value of the merchandise exchanged is $41,860. Esquire views the financing component of this contract as significant. Required: Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2024 interest accrual, and the March 31, 2025 collection. What is the effective interest rate on the note? Record the sale of merchandise. Record the interest accrual on December 31. Record the interest accrual on March 31. Record the cash collection.
- On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $36,000 on March 31, 2022. The fair value of the merchandise exchanged is $33.570. Esquire views the financing component of this contract as significant. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods solds, an December 31, 2021 interest accrual, and the March 31, 2022 collection, 2. What is the effective interest rate on the note?According to the ideas behind the revenue recognition standard of the FASB, when a seller enters into a contract with a buyer, the seller accepts certain performance obligations in exchange for the promise of receiving assets from the buyer. Under this standard, when does the seller RECOGNIZE REVENUE? When the seller enters into a contract with the buyer When the seller satisfies a performance obligation to the buyer When the seller spends 50 percent or more of the cash needed to serve the buyer When the seller collects cash from the buyerHolt Industries received a $2,000 prepayment from the Ramirez Company for the sale of new office furniture.Holt will bill Ramirez an additional $3,000 upon delivery of the furniture to Ramirez. Upon receipt of the $2,000prepayment, how much should Holt recognize for a contract asset, a contract liability, and accounts receivable?
- Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. On what date does a contract exist between Cass and Dearborn? 2. What are Cass’s performance obligations in the contract? 3. What is the transaction price? 4. Does this transaction price need to be allocated? 5. Prepare Cass’s journal entries related to the contract with Dearborn.On October 1, 2022, Harlan received a $15,000, six-month, 10% note in exchange for goods sold to McBride Company. Prepare the journal entry to record the receipt of the note on October 1, 2022. Prepare the adjusting entry to record the accrued interest on the note at December 31, 2022. Write a wriiten explanation on what would Harlan do if McBride dishonors its note, but Harlan still expects to eventually collect it?Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. What is the transaction price? 2. Prepare Cass’s journal entries related to the contract with Dearborn.