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Facts: On January 1 , Year 5 , SDF sold furniture to a customer for $ 4 , 0 0 0 with three years' interest
Facts: On January Year SDF sold furniture to a customer for $ with three years' interestfree credit. The customer took delivery of the furniture on that day. The $ is payable to SDF on December Year The applicable discount rate based on the customer's credit profile is B percent.
Required: Determine the transaction price for the sale of furniture.
Solution: The transaction price is $$ because the time value of money must be considered when determining the transaction price.
Note that interest income will also be recognized each year as follows:
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