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Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles.The snowmobiles were delivered on January 1, 2021, and Arcticreceived a note from Seneca indicating that Seneca will pay Arctic$40,000 on a future date. Unless informed otherwise, assume thatArctic views the time value of money component of this arrangementto be significant and that the relevant interest rate is 8%. (FV of$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)(Use appropriate factor(s) from the tablesprovided.)

Required:

1. Assume the note indicates that Seneca is to pay Arctic the$40,000 due on the note on December 31, 2021. Prepare the journalentry for Arctic to record the sale on January 1, 2021.

2. Assume the same facts as in requirement 1, and prepare thejournal entry for Arctic to record collection of the payment onDecember 31, 2021.

3. Assume instead that Seneca is to pay Arctic the $40,000 due onthe note on December 31, 2022. Prepare the journal entry for Arcticto record the sale on January 1, 2021.

4. Assume instead that Arctic does not view the time value of moneycomponent of this arrangement to be significant, and that the noteindicates that Seneca is to pay Arctic the $40,000 due on the noteon December 31, 2021. Prepare the journal entry for Arctic torecord the sale on January 1, 2021.