Exercise 6-13 (Algo) Time value of money for deferred revenue [LO6-6] Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $32,500. Seneca paid for the snowmobiles on January 1, 2024, with delivery to occur subsequently. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 10%. Required: 1. Assume that, on January 1, 2024, Seneca prepays Arctic for a December 31, 2024, delivery of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. 2. Prepare the journal entry for Arctic to record delivery of the snowmobiles on December 31, 2024. 3. Assume instead that delivery is to occur on December 31, 2025. Prepare the journal entry for Arctic to record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. 4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant. Also assume that, on January 1, 2024, Seneca prepays Arctic for a December 31, 2024, delivery of the snowmobiles and that Seneca prepays the present value of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2024.

Exercise 6-13 (Algo) Time value of money for deferred revenue [LO6-6] Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $32,500. Seneca paid for the snowmobiles on January 1,2024, with delivery to occur subsequently. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 10%. Required: 1. Assume that, on January 1, 2024, Seneca prepays Arctic for a December 31, 2024, delivery of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. 2. Prepare the journal entry for Arctic to record delivery of the snowmobiles on December 31,2024. 3. Assume instead that delivery is to occur on December 31, 2025. Prepare the journal entry for Arctic to record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. 4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant. Also assume that, on January 1, 2024, Seneca prepays Arctic for a December 31, 2024, delivery of the snowmobiles and that Seneca prepays the present value of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2024. Journal entry worksheet Assume that delivery is to occur on December 31, 2024. Record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. Note: Enter debits before credits. Journal entry worksheet 4 Record delivery of the snowmobiles on December 31, 2024. Note: Enter debits before credits. Journal entry worksheet Assume instead that dellvery is to occur on December 31, 2025. Record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmoblles. Note: Enter debits before credits. Journal entry worksheet Assume instead that Arctic des noont view the time value of money component of this arrangement to be significapt. Also assume that, on January 1, 2024, Seneca prepays Arctic for a December 31, 2024 delivery of the snowmobiles, and that Seneca prepays the present value of the snowmobiles. Record collection on January 1, 2024. Note: Enter debits before credits