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When an equipment dealer receives a long term note in exchange for equipment, and the stated rate of interest is indicative o

When an equipment dealer receives a long term note in exchange for equipment, and the stated rate of interest is indicative o
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Answer #1
The correct answer is (4th) : is credited to sales revenue at the exchange date
Explanation through an example
Let Cost of equipment $10,000
Long term note received for 5 years. Interest rate of note 5% p.a. and market rate is also 5%
Since, market rate and coupon rate of the long term note is same hence, present value of future cash flows is also $10,000.
hence, entry to be passed at the time of sale
Debit Credit
Dr. Long term note receivable $10,000
   Cr. Sales revenue $10,000
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