Prepare the adjusting journal entries to adjust the notes

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Sale of inventory on January 2, 20x5 on the following terms: blended payments of principal and interest of 4% over 5 years with the first payment due on December 31, 20x5. The customer's incremental borrowing rate is 8%. Floyd's incremental borrowing rate is 6%. The entry to record the initial transaction was to debit Notes Receivable and credit revenue for $1,500,000. The first payment was received at year-end and was credited to the Notes Receivable Account.

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Problem 1: Prepare the adjusting journal entries to adjust the notes receivable/revenue accounts at December 31, 20x5.

Reference no: EM132675413

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