Interest revenue, Financial Accounting

Assignment Help:

Interest revenue:

At the end of 2012, a manufacturer sells machinery to a customer for $90,000. $30,000 is paid immediately, and the customer signs a promissory note for the remainder. The note specifies that another $30,000 is to be paid at the end of 2013, and the final $30,000 is to be paid at the end of 2014.

A rate of 6% per year would normally be charged for this type of financing. However, the manufacturer provides free financing; no interest is charged.

a.   What amount should be recorded for the note receivable when this sale is made?

b.   How much sales revenue should be recognized in 2012?

c.   How much interest revenue should the manufacturer recognize in 2013?

d.   How much of the 2013 payment will be applied towards reducing the principal amount of the note receivable?

e.   How much interest revenue should the manufacturer recognize in 2014?


Related Discussions:- Interest revenue

What net carrying amount, On June 30, 2011, Omara Co. had outstanding 8%, $...

On June 30, 2011, Omara Co. had outstanding 8%, $3,000,000 face amount, 15-year bonds maturing on June 30, 2021. Interest is payable on June 30 and December 31. The unamortized bal

Non-quantifiable factors to accept the proposal, Any non-quantifiable facto...

Any non-quantifiable factors you feel might influence the decision to accept the proposal. Net present value methods are merely assessments of factors that we can quantify. The

Liberal credit standards, In order to enhance sales from their present annu...

In order to enhance sales from their present annual $35 million, ABC Company, a retailer, is considering more liberal credit standards. Presently, the firm has an average collectio

Half secret trusts-secret trusts-trusts laws and accounts, Half secret trus...

Half secret trusts In this type of trust the will states that the gift is on trust, but the name of the beneficiary is not specified. Since the existence of a trust is disclose

Calculate the value of bonds, Calculate the value of each of the following ...

Calculate the value of each of the following bond Issuer Face Value Coupon Rate Maturity Bid Yield Bid Price

Ordinary annuity , Number of Periods of a one Payment a) If you deposit ...

Number of Periods of a one Payment a) If you deposit money today in an account that pays 7.5% yearly interest, how long will it take to double your money? b) What's the future

Errors in financial statements, Errors in Financial Statements The follo...

Errors in Financial Statements The following financial statements are available for Sherwood Real Estate Company: Balance Sheet Assets Liabilities Cash . . . . . . . . . . .

Business mathamatics, im doing compound interest my calculator doest have a...

im doing compound interest my calculator doest have anxy butyx cant do nothing with the ten being the power of .9

Ratios, equity share capital rs 10 200 10% preference share capital 80 15%...

equity share capital rs 10 200 10% preference share capital 80 15% debenture 20 profit before interest and taxes 60 proposed dividend 20 provision fo

Show example on ratio calculations, Q. Show example on Ratio calculations? ...

Q. Show example on Ratio calculations? The current gearing of Springbank plc = 100 × (3·5m/4m) = 87·5% Total debt after issuing $3·4m of debt = 3·5m + 3·4m = $6·9m New le

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd