Zahava Corporation sells equipment to Ari Company for $700,000. Ari does not need the equipment until December 31, 2021, but agrees to pay $600,000 immediately on December 31, 2019, in order to assist Zahava with finances. The remaining $100,000 is due upon delivery on December 31, 2021. Zahava typically can borrow at 5%. 1. Prepare the journal entry Zahava makes to record the receipt of $600,000 on December 31, 2019. 2. Prepare the jornal entry, if any, Zahava makes in 2020. 3. Prepare the journal entry Zahava makes to record delivery of the goods and collection of the remaining $100,000 on December 31, 2021.
Zahava Corporation sells equipment to Ari Company for $700,000. Ari does not need the equipment until December 31, 2021, but agrees to pay $600,000 immediately on December 31, 2019, in order to assist Zahava with finances. The remaining $100,000 is due upon delivery on December 31, 2021. Zahava typically can borrow at 5%. 1. Prepare the journal entry Zahava makes to record the receipt of $600,000 on December 31, 2019. 2. Prepare the jornal entry, if any, Zahava makes in 2020. 3. Prepare the journal entry Zahava makes to record delivery of the goods and collection of the remaining $100,000 on December 31, 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 12P: Hamlet Corporation purchases computer equipment at a price of 100,000 on January 1, 2019, paying...
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Zahava Corporation sells equipment to Ari Company for $700,000. Ari does not need the equipment until December 31, 2021, but agrees to pay $600,000 immediately on December 31, 2019, in order to assist Zahava with finances. The remaining $100,000 is due upon delivery on December 31, 2021. Zahava typically can borrow at 5%.
1. Prepare the
2. Prepare the jornal entry, if any, Zahava makes in 2020.
3. Prepare the journal entry Zahava makes to record delivery of the goods and collection of the remaining $100,000 on December 31, 2021.
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