Question
Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the purchase call for Right Now to take delivery of
Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the purchase call for Right Now to take delivery of the equipment on June 1 , 2016 upon transfer of $50,000 to ARCSOFT on that same day. Additional payments of $200,000 is to be paid by Right Now to ARCSOFT on June 1, 2017 and June 1, 2018. The equipment will be usable upon delivery with no further involvement by ARCSOFT. Both companies only make adjusting entries at the end of the year. The normal borrowing rate for Right Now is 8%.
What journal entries should Right Now and ARCSOFT make on:
June 1, 2016
Dec 31, 2016
Dec 31, 2017
June 1, 2018
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
International Accounting A User Perspective
Authors: Suadagaran, Shahrokh M, Smith Lawrence Murphy
5th Edition
1531018661, 9781531018665
