Question
On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In...
On January 1, 2021, Wright Transport sold four school buses to
the Elmira School District. In exchange for the buses, Wright
received a note requiring payment of $526,000 by Elmira on December
31, 2023. The effective interest rate is 7%. (FV of $1, PV of $1,
FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables provided.):
Required:
1. How much sales revenue would Wright
recognize on January 1, 2021, for this transaction?
2. Prepare journal entries to record the sale of
merchandise on January 1, 2021 (omit any entry that might be
required for the cost of the goods sold), the December 31, 2021,
interest accrual, the December 31, 2022, interest accrual, and
receipt of payment of the note on December 31, 2023.
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