Question

Bridgeport Bear Inc. is a retailer of nursery furniture. On April 1, 2020, Bridgeport sold a nursery set to a customer and received a $3,500 3-year non-interest bearing note. Bridgeport has a December 31 year end and the market rate of interest is 4%.

1. Calculate the amount of the sale. Use 1. PV.1 Tables, 2. a financial calculator, or 3. Excel functions to arrive at the amount to record the note receivable. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 8,971.)

Note Receivable =

2. Record all entries associated with the note receivable for the first year of the note. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 8,971.)

Date	Account Titles and Explanation	Debit	Credit
April 1, 2020	Notes Receivable
	Sales Revenue
December 31, 2020	Notes Receivable
	Interest Income

3. How will the accounts used in the transactions in part b. be reported on the statement of comprehensive income and the statement of financial position.

Statement of Comprehensive Income

Interest Income	$
Which account here?

Statement of Financial Position

Notes Receivable

$

Answer 1

1. Using excel function, PV of the note receivable = $2855

Workings:

NPER	3
FV	3500
PMT	0.0
Rate	4.00%
PV	$3111.5	[-pv(rate,nper,pmt,fv,0)

2.

Date	Account Titles and Explanation	Debit	Credit
April 1, 2020	Notes receivable	3111.5
	Sales revenue		3111.5
Dec 1,2020	Notes receivable	93.3
	Interest income		93.3
	[3111.5 *4% *9/12]

3.

Statement of comprehensive income:
Sales revenue	3111.5
Interest Income	93.3
Statement of financial position:
Notes receivable	3205

if any dounbts kindly mention in comment