Thursday
April 24, 2014

Homework Help: accounting-installment sales journal entry

Posted by Toni on Friday, October 24, 2008 at 4:25pm.

Question:

On 12/31/07, Company A sold equipment for $1,800,000. The equipment had a carrying amount of $1,200,000. At the time of the sale the buyer paid $300,000 cash and signed a $1,500,000 note bearing interest of $1,500,000 note bearing interest at 10% payable in five annual installments of $300,000. Company A accounts for the sale under the INSTALLMENT METHOD. On 12/31/08 the buyer paid $300,000 principal and $150,000 interest. What are the journal entries for Company A at the time of the sale?

I am note sure whether the interest should be included in the Installment Receivables / Deferred Gross Profit amounts or if interest is entered separately.

This is a CPA question that asks about the amount of revenue that should be recognized on 12/31/08 but I need clarity on how to do the journal entries.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

accounting - Invested $105,000 cash, office equipment with a value of $6,000, ...
Intermediate accounting - Rosson Corporation, which began business on January 1...
accounting question - I have to prepare a general journal entry for a company of...
Financial and managerial accounting - 1. Use the following data for questions 1 ...
Financial and managerial accounting - 1. Use the following data for questions 1...
accounting - For the year ending December 31, 2010, Johnson Manufacturing ...
accounting - 4/4/04, Corporation, which has a 12/31 year end authorized $1,500,...
accounting - On April 25, 2010, Bullseye Company purchased all of the ...
Accounting - The SOO Company has machinery that it acquired a number of years ...
accounting - how would the table of analysis be set up with these transactions: ...

Search
Members