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KIA Co. enters into a contract with a customer to supply furniture on 31 December...

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Accounting

KIA Co. enters into a contract with a customer to supply furniture on 31 December 2020. Control of the furniture transfers to the customer on that date. The price stated in the contract is $960,000 and is due for payment on 31 December2025. Market rates of interest available to this particular customer are 10%.

Required: Explain how this transaction should be accounted for in the financial statements of Keema Co for the year ended 31 December 2020, 2021 and 2022

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