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Question 2: Revenue (35 marks) (a) Barney Ltd is entering into a contract to sell Motor vehicle spare parts to Rubble Ltd for $30,000. The
Question 2: Revenue (35 marks) (a) Barney Ltd is entering into a contract to sell Motor vehicle spare parts to Rubble Ltd for $30,000. The agreement allows Rubble Ltd to pay for these goods by three equal instalments of $8,500 and the balance remaining payable in the final instalment, the first instalment being required on 1 October 2022 and the remainder to be paid every 3 months after that. The Motor Vehicle spare parts are delivered to Rubble Ltd on 1 July 2022. Barney Ltd determine that an appropriate discount rate for interest on this transaction is 9% per annum. The agreement stipulates that the interest revenue is due and payable when each repayment is due. Narrations are required for this question. Add rows to the answer tables if necessary. Required (i) Complete the table below to determine the interest component of the payments. (11 marks) (ii) Give the journal entries to record the revenue. Note that giving the correct dates of your journal entries is essential. (17 marks)
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