The following is an independent error made by a company that uses the periodic inventory system:Equipment with a book value of $70,000 and a fair value of $100,000 was sold at the beginning of the year. A 2-year, non-interest-bearing note for $129,960 was received and recorded at its face value, and a gain of $59,960 was recognized. No interest revenue was recorded and 14% is a fair rate of interest.What is the journal entry needed to correct the sale of equipment? Ignore income taxesWhat is the journal entry adjustment needed to correct interest related to the note? A2-year, non-interest-bearing note for $129,960 was received and recorded at its face value, and a gain of $59,960 was recognized. You have enough information to calculate the interestwithout PV tables by comparing the fair value of the equipment to the face value of the note, or by fixing the amount of the gain. Assume this entry was made:PAGE 1GENERAL JOURNALDATEACCOUNT TITLEPOST. REF.DEBITCREDITNotes ReceivableJan. 1131129,960.00Accumulated Depreciation19810,000.0018180,000.00Equipment59,960.00436Gain on Sale of equipment2.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

A2-year, non-interest-bearing note for $129,960 was received and recorded at its face value, and a gain of $59,960 was recognized. You have enough information to calculate the interest without PV tables by comparing the fair value of the equipment to the face value of the note, or by fixing the amount of the gain. Assume this entry was made: PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Notes Receivable Jan. 1 131 129,960.00 Accumulated Depreciation 198 10,000.00 181 80,000.00 Equipment 59,960.00 436 Gain on Sale of equipment 2.

A2-year, non-interest-bearing note for $129,960 was received and recorded at its face value, and a gain of $59,960 was recognized. You have enough information to calculate the interest without PV tables by comparing the fair value of the equipment to the face value of the note, or by fixing the amount of the gain. Assume this entry was made: PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Notes Receivable Jan. 1 131 129,960.00 Accumulated Depreciation 198 10,000.00 181 80,000.00 Equipment 59,960.00 436 Gain on Sale of equipment 2.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

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