Question

Presented below are two independent revenue arrangements for Indigo Company. Respond to the requirements related to each revenue arrangement ?Your answer is incorrect. Try again. Indigo sells 3D printer systems. Recently, Indigo provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Indigo sells Lyle Cartright a 3D system, receiving a $5,300 zero interest bean ng note on January 1 2017. The cost ofthe 3D printer system is $4,240 Indigo imputes a 6%, interest rate on szero-interest no e transaction. Prepare the journal entry to record the sale on January 1, 2017, and compute the total amount of revenue to be recognized in 2017. (Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No entry" for the account tities and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971.) Account Titles and Explanation Credit To record sales) To record cost of goods sold)

Answer 1

Lyle Cartright A/c Debit $4716.98113*

To Sales A/c $4240

To Unearned Income A/c $476.98113

( To record sales)

* present value of $5300 @6% for 2 years

Unearned Income A/c Debit $476.98113

To P & L A/c $476.98113

( full income to be recognized in 2017 as it is year of sale)

No entry required for cost of goods sold