On August 31, 2020 ABC Inc. made a sale of equipment that has a list price of $1,900,000. The payment arrangements made with the customer are as follows: the customer will pay equal annual payments over a period of 5 years at an interest rate of 2.5%. You have established that your customers incremental borrowing rate is 6%. ABC Inc.s incremental borrowing rate is 5%. Your year-end is December 31. Assume that ABC Inc. is a publicly accountable entity.

Required

Prepare all journal entries relative to this transaction on your books at the following dates:

(a) Aug 31, 2020

(b) Dec 31, 2020

(c) Aug 31, 2021