Question
On 1 January 2017, Duke Ltd sold a machine to a customer for 400,000 with two years interest-free credit. The machine was delivered immediately to
On 1 January 2017, Duke Ltd sold a machine to a customer for ‚¬400,000 with two years’ interest-free credit. The machine was delivered immediately to the customer on the same date. The ‚¬400,000 is payable to Duke Ltd on 31 December 2018. Duke Ltd has an enforceable right to payment over the two-year period. The relevant rate of interest is 8%.
Required: Explain how this transaction should be accounted for by Duke Ltd in the financial statements for the years ended 31 December 2017 and 2018.
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Duke Ltd would account for this transaction as a sal...
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
11th edition
538480289, 978-0538480284
