Kingbird Corp. sells idle machinery to Enyart Company on July 1, 2017, for $46,000. Kingbird agrees...
Kingbird Corp. sells idle machinery to Enyart Company on July 1, 2017, for $46,000. Kingbird agrees to repurchase this equipment from Enyart on June 30, 2018, for a price of $47,840 (an imputed interest rate of 4%).
Prepare the journal entry for Kingbird for the transfer of the asset to Enyart on July 1, 2017
Prepare any other necessary journal entries for Kingbird in 2017
Prepare the journal entry for Kingbird when the machinery is repurchased on June 30, 2018
Homework Answers
| Date | Account Titles and Explanation | Debit | Credit |
| July 1, 2017 | Cash | $46,000 | |
| Machinery | $46,000 | ||
| December 31, 2017 | Interest expense (46000*4%*6/12) | 920 | |
| Machinery | 920 | ||
| June 30, 2018 | Interest expense (46000*4%*6/12) | 920 | |
| Machinery | 920 | ||
| June 30, 2018 | Machinery | $47,840 | |
| Cash | $47,840 | ||
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