On January 1, 20X4, XYZ Equipment Corp delivered a road grader and an excavator to a client Pertinent details of the transaction follow XYZ paid $290,000 for the road grader It normally sells these graders for $377,000 cash XYZ paid $218,000 for the excavator It normally sells these excavators for $273,000 cash XYZ received $75,000 cash on delivery of the equipment and accepted a $600,000, three year, interest free note receivable payable at $200,000 per year, first payable on January 1, 20X5 The market rate of interest for transactions of this nature is 4 per annum XYZ, whose fiscal year end is December 31, prepares its financial statements in accordance with IFRS It uses the specific identification method to account for inventory All payments on the notes receivable were made on the scheduled dates XYZ only prepares accruals and adjusting entries at year end Allocate the purchase price between the two deliverables Prepare XYZ's journal entries pertaining to the sale of the equipment on January1, 20X4 Prepare XYZ's journal entries for each of December 31, 20X4, January 1, 20X5, December 31, 20X5, January 1, 20X6, December 31, 20X6, and January 1, 20X7

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On January 1, 20X4, XYZ Equipment Corp. delivered a road grader and an excavator to a client. Pertinent details of the transaction follow: XYZ paid

On January 1, 20X4, XYZ Equipment Corp. delivered a road grader and an excavator to a client. Pertinent details of the transaction follow:

XYZ paid $290,000 for the road grader. It normally sells these graders for $377,000 cash.
XYZ paid $218,000 for the excavator. It normally sells these excavators for $273,000 cash.
XYZ received $75,000 cash on delivery of the equipment and accepted a $600,000, three- year, interest-free note receivable payable at $200,000 per year, first payable on January 1, 20X5.
The market rate of interest for transactions of this nature is 4% per annum.
XYZ, whose fiscal year end is December 31, prepares its financial statements in accordance
with IFRS. It uses the specific identification method to account for inventory. All payments on the notes receivable were made on the scheduled dates. XYZ only prepares accruals and adjusting entries at year end.

Allocate the purchase price between the two deliverables.

Prepare XYZ's journal entries pertaining to the sale of the equipment on January1, 20X4.

Prepare XYZ's journal entries for each of December 31, 20X4, January 1, 20X5, December 31, 20X5, January 1, 20X6, December 31, 20X6, and January 1, 20X7.