Question
On January 1, 20x1, ABC Co. sold machinery costing 1,750,000 with accumulated depreciation of 1,100,000 in exchange for a 3-year, 900,000 noninterest-bearing note receivable due
On January 1, 20x1, ABC Co. sold machinery costing 1,750,000 with accumulated depreciation of 1,100,000 in exchange for a 3-year, 900,000 noninterest-bearing note receivable due as follows:
.............Date.....................Amount of installment
December 31, 20x1 ............... 400,000
December 31, 20x2 ............... 300,000
December 31, 20x3................. 200,000
The prevailing rate of interest for this type of note is 10%. How much is the total income to be recognized for the year 20x1 in relation to the sale of the machinery?
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
18th edition
1260190080, 1260190083, 978-1259917059
