Reference no: EM132762988

On October 31, 2021, XYZ Corporation (an equipment manufacturer) sold equipment that cost $150,000 ABC Company (a construction company). The agreement stipulated that ABC would make five payments of $60,000 (including interest) annually on October 31. The first note payment is to be made on October 31, 2021.

Assuming that a prevailing interest rate of 6% applies to this contract:

n =5 interest rate= 6%

Future value of 1: 1.33823

Present Value of 1: 0.74726

Future value of an ordinary annuity: 5.63709

Present value of an ordinary annuity: 4.21236

Present value of an annuity due: 4.46511

Problem 1: Prepare the journal entry for XYZ to record sale of the equipment on 10/31/21.

Problem 2: Prepare the journal entry(s) for XYZ for year ended 12/31/22, if any, associated with this sale of the equipment

Problem 3: Prepare the entry for the receipt of payment on 10/31/2022 for XYZ if the company does not use reversing entries.