The following information on selected transactions for the year has been provided by Baker Company: Proceeds from issuing bonds
1 answer:
You might be interested in
Answer:
First find the present value of the lease. Payments are constant and fixed so this is an annuity. As it is to be paid from the beginning, it is an Annuity due.
= Annuity * Present value interest factor of annuity due, 5 years, 7%.
= 37,400 * 4.3872
= $164,081
Date Account Details Debit Credit
Dec. 31, 2019 Lease Receivable $164,081
Cost of goods sold $104,800
Sales $164,081
Inventory $104,800
Date Account Details Debit Credit
Dec. 31, 2019 Cash $37,400
Lease Receivable $37,400
