Question
Crown Ltd sells furniture on 12 months' interest free terms to qualifying customers. On 30 June 2019, Crown Ltd sells $20 000 of furniture to
Crown Ltd sells furniture on 12 months' interest free terms to qualifying customers. On 30 June 2019, Crown Ltd sells $20 000 of furniture to Ms Smith, payable by 30 June 2020. The appropriate interest rate for this transaction is determined to be 6% per annum. The present value of the $20 000 to be received in one year's time is $18 868. The journal entry to be recorded by Crown Ltd at 30 June 2019 is:
Select one:
Dr Receivable $20,000
Cr Sales revenue $18,868
Cr Interest revenue $1,132
Dr Receivable $20,000
Cr Sales revenue $20,000
Dr Receivable $20,000
Cr Sales revenue $18,868
Cr Deferred interest $1,132
Dr Bank $20,000
Cr Receivable $20,000
None of these
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