Homework Answers
| Required 1 : | ||||
| Sales Revenue = $ 408,483 | ||||
| Explanation : | ||||
| Sales Revenue = Present value of Notes Receivable | ||||
| Sales Revenue = $ 529,000* 0.77218 | ||||
| Sales Revenue = $ 408,483 | ||||
| Present value of $ 1 , N= 3 years , i= 9 % is 0.77218 | ||||
| Required 2 : | |||
| Date | General Journal | Debit | Credit |
| 01-01-2021 | Note Receivable | $ 529,000 | |
| Discount on Note receivable(529,000-408,483) | $ 120,517 | ||
| Sales revenue | $ 408,483 | ||
| (To record the sale of goods on January 1,2021 ) | |||
| 31-12-2021 | Discount on Note receivable($408,483 *9 % ) | $ 36,763 | |
| Interest Revenue | $ 36,763 | ||
| (To record Interest Revenue on December 31,2021) | |||
| 31-12-2022 | Discount on Note receivable{$408,483+36,763) *9 %} | $ 40,072 | |
| Interest Revenue | $ 40,072 | ||
| (To record Interest Revenue on December 31,2021) | |||
| 31-12-2023 | Cash | $ 529,000 | |
| Discount on Note receivable{408,483+36,763+40,072) *9 %} | $ 43,679 | ||
| Interest revenue{408,483+36,763+40,072) *9 %} | $ 43,679 | ||
| Note receivable | $ 529,000 | ||
| (To record payment received on Note ) |
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