An uninsured patient cannot pay for a major life threatening surgery. ABC Health offers the patient long term financing where the entire amount can be paid in full for 3 years.The cash price of the surgery is $100,000.00 and a contract is issued with an implicit rate of 5.5%BeginningEndingYear123AccountsInstructionsA. Record the journal entry as of the surgery dateAccounts$100,000.00Accounts$111,303.00AccountsDebitAccountsB. At the end of the first year ABC recognizes interest associated with the loanDebit$105,500DebitInterestC. At the end of the second year ABC recognizes interest associated with the loanDebit$5,500$5,803$6,122DebitCreditD. At the end of the third year ABC recognizes interest associated with the loanCreditCreditCreditE. The patient pays the full amount of the loan receivable at the end of the third yearCredit$105,500.00$ 111,303.00$ 117,425.00

Journal entries are the entries recorded in the books of accounts to record business transactions of…

An uninsured patient cannot pay for a major life threatening surgery. ABC Health offers the patient long term financing where the entire amount can be paid in full for 3 years. The cash price of the surgery is $100,000.00 and a contract is issued with an implicit rate of 5.5% Beginning Year 1 2 3 Accounts Instructions A. Record the journal entry as of the surgery date Accounts $100,000.00 Accounts $111,303.00 Accounts Debit Accounts Debit $105,500 B. At the end of the first year ABC recognizes interest associated with the loan Debit Interest Debit $5,500 C. At the end of the second year ABC recognizes interest associated with the loan $5,803 Debit $6,122 Credit D. At the end of the third year ABC recognizes interest associated with the loan Credit Credit Credit E. The patient pays the full amount of the loan receivable at the end of the third year Ending $105,500.00 = $ 111,303.00 $ 117,425.00 Credit

An uninsured patient cannot pay for a major life threatening surgery. ABC Health offers the patient long term financing where the entire amount can be paid in full for 3 years. The cash price of the surgery is $100,000.00 and a contract is issued with an implicit rate of 5.5% Beginning Year 1 2 3 Accounts Instructions A. Record the journal entry as of the surgery date Accounts $100,000.00 Accounts $111,303.00 Accounts Debit Accounts Debit $105,500 B. At the end of the first year ABC recognizes interest associated with the loan Debit Interest Debit $5,500 C. At the end of the second year ABC recognizes interest associated with the loan $5,803 Debit $6,122 Credit D. At the end of the third year ABC recognizes interest associated with the loan Credit Credit Credit E. The patient pays the full amount of the loan receivable at the end of the third year Ending $105,500.00 = $ 111,303.00 $ 117,425.00 Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 4RE

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A patient's total surgery charges are $1,278. The patient must pay the annual deductible of $1,000, and the policy states a 80-20 coinsurance. What does the patient owe? Explain
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