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

Describe passive income, Q. Describe Passive Income? Passive Income - I...

Q. Describe Passive Income? Passive Income - Includes income derived from such sources like dividends, royalties, interest, rents, amounts received from personal service contra

Evaluation of net working capital, Q. Evaluation of Net working capital? ...

Q. Evaluation of Net working capital? The evaluation presumes that several key variables will remain constant such as the inflation rates, discount rate and the taxation rate.

When youre using accounting software, when youre using accounting software ...

when youre using accounting software why would you use hot keys and shortcuts a.to quickly access commands b.to input data for you c.to start the program d.to write checks

Calculate the equity multipler, Presented below are condensed financial sta...

Presented below are condensed financial statements adapted from those of two actual companies competing as the primary players in a specialty area of the food manufacturing and dis

Goods at branch marked down, GOODS AT BRANCH MARKED DOWN, OR MARKED UP BY A...

GOODS AT BRANCH MARKED DOWN, OR MARKED UP BY AN ADDITIONAL AMOUNT If goods at the branch are not selling well, branch could be authorized by the Head office to mark-down the good

Using the irs amortization calculate the interest, Interest on Zeroes: ...

Interest on Zeroes: Tesla Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero coupon bonds to raise the money. The required

Current market cost of debt, The cost of debt must be based upon the curren...

The cost of debt must be based upon the current market cost of debt. Where different kinds of debt are used estimates of more than one debt cost may be necessary and these costs we

Renfro rentals has issued bonds, a) The actual risk-free rate is 3%, and in...

a) The actual risk-free rate is 3%, and inflation is usual to be 2% for the next 2 years. A 2-year Treasury security yields 6.7%. What is the maturity risk premium for the 2-year s

P6-2b, #questioSavage Distribution markets CDs of the performing artist Lit...

#questioSavage Distribution markets CDs of the performing artist Little Sister. At the beginning of October, Savage had in beginning inventory 1,200 Sister’s CDs with a unit cost o

Income account-trusts laws and accounts, INCOME ACCOUNT (a) Classific...

INCOME ACCOUNT (a) Classification : Income will be classified under appropriate headings: Rents; Interest on Government securities; Dividends; Interest on

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