Question

On january 1, 2016, wright transport sold four school busses to the elmira school district. in exchange for the buses, wright received a note requiring payment of $515,000 by elmira on december 31, 2018. the effective interest rate is 8%. (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) (use appropriate factor(s) from the tables provided.): required: 1. how much sales revenue would wright recognize on january 1, 2016, for this transaction?

Answer 1

Sales revenue on January 1, 2016 would be recorded as $515,000 becasue if the amount if paid today that is the amount that would be received. For every day that follows sales revenue would be calculated by the following equation (515,000+(.08*515,000/365)