Question

On January 1, 2020 Cars C Us sold a fleet of cars to a car rental company accepting a 2%, 5-year note requiring interest payments at the end of each year. Cars C Us received a $21,000.00 down payment and a note with a face value of $273,000.00 in exchange for the cars. The cars had a cost of $231,000. A reasonable borrowing rate of 10% should be used. Prepare the journal entries to record the sale and 2020 and 2021 year end adjusting entries: (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round factor value calculations to 5 decimal places, e.g. 0.52755. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit 1/1/2020 V (To record the sale) Cost of Goods Sold 231000 Inventory 231000 (To record the cost) 12/31/20 12/31/21

Answer 1

$ 103,791.13 Answer Page. Ne No Journal entries to record the sale and 2020 and 2021 young end adjusting entries:- Date Particular Debit Credit 11.120 Cash $ 21000 Notes receivable 4273000 Sales revenue $ 190208.871 Discount on notes receivable cro record the sale) cost of goods sold $231000 Inventory +231000 (To record the cost) Cash $ 5460 |(2731)20 Discount on notes receivable $13560.89 Interest revenue $19020.89 cash $5460 discount on notes oreceivable $14916.98 Interest revenue $20376.98 011120, 0, Sales revenue = 273000 X: "T+10%) 112/31/21 10% [24300 (243000 X 0.63092]+[5460 X 3.79079 ) 169,511.167 20,697,71 12 (31)20, cash $ 190208.87 = 273000 X 27, $5460 Interest revenue a 190208.87 X 10% = $19020.89 Interest revenue = (190 (190208.87 +13560.89) X10% * $20376.98 12/31/21,