South Park Appliances Inc. sold and delivered a set of kitchen appliances to a customer...
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Accounting
South Park Appliances Inc. sold and delivered a set of kitchen appliances to a customer on December 31, 2019 for 6 payments over 3 years, no interest.
The customer will make six SEMI-ANNUAL payments of $800 each, starting June 30, 2020 (6 payments in total, $800 every six months).
The customers borrowing rate for a similar transaction would normally be 5%. The set of kitchen appliances inventory cost was $2,200. SOUTH PARK has a Dec. 31 year end and follows IFRS.
Required: Show and label all calculations. (Round to the nearest dollar.)
PV tables are provided at end of this document if required.
Calculate the revenue SOUTH PARK Inc. should record on the product sale in 2019.
Prepare the journal entries for SOUTH PARK Inc. on the following dates:
December 31, 2019 on sale of the product
June 30, 2020 on receipt of the first payment
Dec 31, 2020 on receipt of the second payment
What is the total value recorded for notes / interest receivable relating to this note on the statement of financial position at December 31, 2020? (After the payment was made on that date.)
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