Hodge Technology Ltd signs a contract on 1 July 2020 with PNG Telecom Ltd to...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Hodge Technology Ltd signs a contract on 1 July 2020 with PNG Telecom Ltd to provide and service switching equipment for a new exchange. The contract provides for 4 annual payments (in arreas) of $100,000 on 30 June each year. If sold separately, the equipment would have a sale price of $300,000 and 4 year service contract would cost $100,000. The equipment is shipped immediately and if PNG Telecom borrowed the money from the local bank the interest rate would be 8% which indicates low credit risk. Hodge has a 30 June year end.
Prepare the journal entries for hodge to record on:
1 July 2020
30 June 2021
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
