On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for thebuses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2020. The effectiveinterest rate is 8%.Required:1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might berequired for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019,interest accrual, and receipt of payment of the note on December 31, 2020.

Question

On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for the
buses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2020. The effective
interest rate is 8%.
Required:
1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?
2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might be
required for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019,
interest accrual, and receipt of payment of the note on December 31, 2020.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Other

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Nate Beggs signs a 1-year contract with BlueBox Video. The terms of the contract are that Nate is re...

A: Revenue recognition principle:   The organization recognizes the revenue in the accounting period af...

Q: On June 1, 2017, Mills Company sells $200,000 of shelving units to a local retailer, ShopBarb, which...

A: Recognition of revenue in a bill and hold arrangement depends on the circumstances. Mills determines...

Q: Prepare an adjusted trial balance from the following account information, considering the adjustment...

A: Adjusted trial balance: Adjusted trial balance is a summary of all the ledger accounts, and it conta...

Q: Assume that on February 12, First Union Co. purchases for cash 6,000 shares of Gilbert Co. stock at ...

A: Total amount paid = (No. of shares x Price per share) + Brokerage fee = (6,000 shares  x $22 per sha...

Q: The following information is available for Oriole Company for the year ended December 31, 2022. ...

A: The statement of cash flow is a financial statement that shows the cash and cash equivalents of a co...

Q: Westinghouse Electric CorporationThe following note appears in the “Summary of Significant Accountin...

A: a)

Q: What is the excess of the issue price of bonds over their face amount called? premium discount secur...

A: Premium on Bonds: When bond market costs higher than its face value then bonds is called at premium....

Q: Lee Company’s current income taxes payable related to its taxable income for 2017 is $320,000. In ad...

A: Given data, Taxable income is $320,000 Tax liability increased is $40,000 Tax asset increased is $10...

Q: Prepare an entity relationship diagram, in good form, for the expenditure cycle, which consists of b...

A: Click to see the answer

Q: Accounting Question

A: Working Capital is calculated by minus Current Liability from Current Asset. Generally higher the ra...

Q: Reservoir Bottling Co. reported the following information at the end of the year. Total currentasset...

A: Given, Current assets is $237,513 Book value is $219,344 and $129,175 Market value $343,222 Current ...

Q: The general rule is that someone who inherits property has a tax basis in that property equal to its...

A: The inherited property is the property other than cash that a person receives after the death of the...

Q: On November 1, the firm of Sails, Welch, and Greenberg decided to liquidate its partnership. The par...

A: 1 (a) (b)

Q: 2. Calculate the manufacturing cost per drum set.

A: Click to see the answer

Q: What are some examples of variable consideration? What are the two approaches for estimating variabl...

A: Definition: Variable consideration: It is an amount that is included in the contract as consideratio...

Q: Part 1: Fixed Assets Think of a business where you have worked, visited or perhaps hope to own one d...

A: Part 1: The business we are considering here is Mobile phones assembly unit. The main function of th...

Q: How does the tax depreciation methods generally permit a higher depreciation than the book depreciat...

A: Book Depreciation: Book Depreciation means the amortization expense amount which are recorded in acc...

Q: Problem 2 Indicate what impact the following adjustments have on the accounting equation, Assets = L...

A: The accounting equation  is true on each occasion. This equation is the basis for the system of dou...

Q: In which situation does the tax depreciation allow the firms to defer paying income taxes?

A: Deferment of income tax liability is also called as Deferred Tax Liability. It means tax liability o...

Q: Microsoft Corporation reported the following information in its financial statements for three succe...

A: Click to see the answer

Q: Required: 1. Classify each cost and its amount as (a) either variable or fixed and (b) either produc...

A: Cost behavior refers to an indicator which show how a cost will change in total due to change in som...

Q: How can we determine the Cash Flow Statement with only Operating and Investing Activities?

A: Cash flow statements are the statements that determine the inflow and outflow of cash from three maj...

Q: Charlie’s Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Pro...

A: a)

Q: What account would be debited (1), what account would be credit (2), and what amount would be paid t...

A: Bonds: Bonds are a debt instrument on which interest is paid. They can be issued at a discount/par o...

Q: Explain how the outbreak of the COVID-19 pandemic impacts on the accounting information system as a ...

A: Introduction The outbreak of COVID 19 have affected all functions of companies all over the world in...

Q: What are the 5 ways the PBO can change?

A: Projected Benefit Obligation:   It is a pension concept in accounting as it is the present value of ...

Q: Merchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for $1...

A: Sales discounts: The merchandisers offer a reduction in sales price on initial sales, to accelerate ...

Q: Would you expect a company in a rapidly growing technological industry to have a high or lowdividend...

A: A company which is growing rapidly in a technogical industry may have low or high dividend payout ra...

Q: Why do most of the firms select straight-line depreciation for book depreciation?

A: Straight Line Depreciation method is a method in which original cost of asset after salvage value is...

Q: (Investment Accounted for under the Equity Method) On July 1, 2018, Fontaine Company purchased for c...

A: Investments:   Companies invest in stocks and bonds of other companies or governmental entity to de...

Q: What are some of the more common uses of data codes in accounting information systems?

A: Click to see the answer

Q: What would be the required journal entry on the date of issuance if a company issues $100,000 five-y...

A: Premium on bonds payable = Issue price of Bonds - Face value of Bonds = $103,769 - $100,000 = $3,769

Q: Explain the accounting for contract modifications.

A: Contract modification may occur when any addition, change, or cancellation of specific terms and con...

Q: (One Temporary Difference, Future Taxable Amounts, One Rate, Beginning Deferred Taxes) Bandung Corpo...

A: Given information is: Taxable Income for year 2017 = $405,000 Tax rate = 40% Income tax payable for ...

Q: What is the Computing equivalent savings per machine-hour? Explain with an example?

A: In costing and especially marginal costing you need make decisions regarding purchase of different m...

Q: What are the two objectives of accounting for income taxes?

A: Click to see the answer

Q: (Consignment Sales) On May 3, 2017, Eisler Company consigned 80 freezers, costing $500 each, to Remm...

A: Click to see the answer

Q: Allee Corp. is evaluating a revenue arrangement to determine proper revenue recognition. The contrac...

A: Click to see the answer

Q: What is an internal exchange transaction and how is it reported?

A: Click to see the answer

Q: What are the advantages of real-time data collection?

A: Click to see the answer

Q: The photo department of Santiago Company shows gross sales of $730,600 for chemical supplies and $93...

A: Gross profit percentage:   Gross profit percentage is the financial ratio that shows the relationsh...

Q: Department G had 1,800 units 25% completed at the beginning of the period, 13,600 units were complet...

A: In first In first Out method, the units produced first are dispatched first.

Q: When cash is paid to retire stock, what is the effect?

A: First of all, retirement of stock means that the company buyback/ repurchase its stock or shares. Th...

Q: Flounder Corp. has income from continuing operations of $246,500 for the year ended December 31, 202...

A: Comprehensive Income includes Income statement and the other comprehensive income for the period end...

Q: On September 1, 1,500 shares of M Company stock are acquired at a price of $24 per share plus a $40 ...

A: Definition: Dividends: This is the amount of cash distributed to stockholders by a company out its e...

Q: Explain the technique known as destructive update.

A: Accounting Information System:   It is a structural framework used by business to collect, store, ma...

Q: Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry...

A: 1. (a1) The Journal entries and the computation are below: Calculation of Gilbert Capital: For Tren...

Q: Net income was $200,800 for the year. Throughout the year the company had outstanding 12,000 shares ...

A: Formula: Basic EPS = ( Net Income - preferred dividend ) / outstanding shares of common stock.

Q: Can you please help me answer number 3 on the screen shot? The financial statements and additional i...

A: To Determine – Equity Multiplier It is financial leverage ratio that measures the ratio or proportio...

Q: What does financing activities includes?

A: Cash Flow Statement:   It is a financial statement prepared by a company to report their cash inflow...