Recording Revenue Under Different Repurchase Agreements On January 1, Miller Inc. sells equipment to Smith Inc. for $110,000. As stipulated in the revenue contract, Miller Inc. will buy back the equipment on December 31 for $117,700. The relevant interest rate is 7% a. Prepare the seller's journal entry on January 1. Date Jan. 1 Cash Account Name Dr. 110,000 Cr. 110,000 Liability to Smith Inc. b. Prepare the seller's journal entry on December 31. Account Name Liability to Smith Inc. Date Dec. 31 Interest Expense To recognize interest. Dec. 31 Liability to Smith Inc. Cash To record payment. Dr. Cr. 7,700 0 0 7,700 117,700 0 0 117,700 c. Assume instead that Miller has the option to buy back the equipment and the fair value of the equipment is expected to decline through the year. How would the answers to parts a and b change (if at all)? Date Jan. 1 Account Name Dr. Cr. 0 0 0 0 Dec. 31 0 0 0 0 To recognize interest. Dec. 31 0 0 0 0 d. Assume instead that Smith has the option to require Miller to buy back the equipment after one year for $117,700 (an amount greater thar the expected fair value of the equipment at that time). How would the answers to parts a and b change (if at all)? Date Account Name Jan. 1 Dec. 31 To record payment. Dec. 31 To record interest. To record payment. OO Dr. Cr. 0 0 0 0 0 0 0 0 0 0 0