Billy's Balloon Factory (BBF) enters into a sales contract with a new customer involving a...
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Billy's Balloon Factory (BBF) enters into a sales contract with a new customer involving a significant financing component. Delivery occurs at the date of the contract inception, However, payment of the contract price of $540,000 will not occur until three years later. The interest rate charged in similar arrangements in the industry is 8%. What amount should BBF record as the sale in the journal? Which financial statement item is impacted by this transaction? Notes Receivable The problem is solving for: Present Value The calculation involves A Single Sum Table Method PU F Factor 540000 X 0.7938 428652 Record the sale in the journal: Date of Delivery Debit Accounts Credit Notes Receivable 428652 Sales Revenue 428652 How much interest will be earned in Year 12 How much interest will be eamed in Year 2? How much interest will be eamed in Year 3? How much interest revenue will Billy's Balloon Factory recognize (in total) over the three year perico
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