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On 1 July 2003 Bigwell Ltd Sells a Machine to Archer

Question 28

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On 1 July 2003 Bigwell Ltd sells a machine to Archer Ltd in exchange for a promissory note which requires Archer Ltd to make five payments of $8,000, the first to be made on 30 June 2004. The machine cost Bigwell Ltd $20,000 to manufacture. Bigwell Ltd would normally sell this type of machine for $30,326 for cash or short-term credit. The implicit interest rate in the agreement is 10 per cent. What are the appropriate journal entries to record the sale agreement and the first two instalments using the gross method?


A) On 1 July 2003 Bigwell Ltd sells a machine to Archer Ltd in exchange for a promissory note which requires Archer Ltd to make five payments of $8,000, the first to be made on 30 June 2004. The machine cost Bigwell Ltd $20,000 to manufacture. Bigwell Ltd would normally sell this type of machine for $30,326 for cash or short-term credit. The implicit interest rate in the agreement is 10 per cent. What are the appropriate journal entries to record the sale agreement and the first two instalments using the gross method? A) B) C) D) E) None of the given answers.
B) On 1 July 2003 Bigwell Ltd sells a machine to Archer Ltd in exchange for a promissory note which requires Archer Ltd to make five payments of $8,000, the first to be made on 30 June 2004. The machine cost Bigwell Ltd $20,000 to manufacture. Bigwell Ltd would normally sell this type of machine for $30,326 for cash or short-term credit. The implicit interest rate in the agreement is 10 per cent. What are the appropriate journal entries to record the sale agreement and the first two instalments using the gross method? A) B) C) D) E) None of the given answers.
C) On 1 July 2003 Bigwell Ltd sells a machine to Archer Ltd in exchange for a promissory note which requires Archer Ltd to make five payments of $8,000, the first to be made on 30 June 2004. The machine cost Bigwell Ltd $20,000 to manufacture. Bigwell Ltd would normally sell this type of machine for $30,326 for cash or short-term credit. The implicit interest rate in the agreement is 10 per cent. What are the appropriate journal entries to record the sale agreement and the first two instalments using the gross method? A) B) C) D) E) None of the given answers.
D) On 1 July 2003 Bigwell Ltd sells a machine to Archer Ltd in exchange for a promissory note which requires Archer Ltd to make five payments of $8,000, the first to be made on 30 June 2004. The machine cost Bigwell Ltd $20,000 to manufacture. Bigwell Ltd would normally sell this type of machine for $30,326 for cash or short-term credit. The implicit interest rate in the agreement is 10 per cent. What are the appropriate journal entries to record the sale agreement and the first two instalments using the gross method? A) B) C) D) E) None of the given answers.
E) None of the given answers.

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