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8.4 Dealer Financing On 1/1/X1, Tractor Co. sold a new combine to Jim's U-Pick farm. The purchase agreement establishes a base price of $100,000, plus

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8.4 Dealer Financing On 1/1/X1, Tractor Co. sold a new combine to Jim's U-Pick farm. The purchase agreement establishes a base price of $100,000, plus a contractual interest rate of 5%, payable in 48 monthly installments of $2,302.93. Control of the combine transferred to Jim when Jim signed the contract and had the combine delivered that same day. If Jim had obtained separate financing (say, a bank loan) for the purchase, his interest rate would have been 6%. What amount of revenue should Tractor Co. record at the date of sale? What guidance should Tractor Co apply to the subsequent measurement of its receivable? Consider the measurement attribute used to record Tractor Co.'s revenues. How does this approach achieve the objective of this measurement attribute? Hint: You might find it useful to use Microsoft Excel's formula options: PMT and PV for this example. Excel walks you through how to input numbers into each formula. 8.4 Dealer Financing On 1/1/X1, Tractor Co. sold a new combine to Jim's U-Pick farm. The purchase agreement establishes a base price of $100,000, plus a contractual interest rate of 5%, payable in 48 monthly installments of $2,302.93. Control of the combine transferred to Jim when Jim signed the contract and had the combine delivered that same day. If Jim had obtained separate financing (say, a bank loan) for the purchase, his interest rate would have been 6%. What amount of revenue should Tractor Co. record at the date of sale? What guidance should Tractor Co apply to the subsequent measurement of its receivable? Consider the measurement attribute used to record Tractor Co.'s revenues. How does this approach achieve the objective of this measurement attribute? Hint: You might find it useful to use Microsoft Excel's formula options: PMT and PV for this example. Excel walks you through how to input numbers into each formula

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