On December 31,2014,Benton Company sold equipment to Cleveland,Inc.,accepting a $400,000 non-interest bearing note receivable in full payment.The note is due on December 31,2017.Cleveland,Inc.normally pays 10% for its borrowed funds.The equipment is carried in Benton's perpetual inventory records at 50% of its cash selling price.The present value of $1 to be received n periods in the future = 1 ÷ (1 + r)ⁿ where r is the rate of interest per period.
Required:
a.Prepare Benton's journal entries to record the sale on December 31,2014.
b.Prepare Benton's journal entry on December 31,2015 necessitated by this transaction.
c.At what amount would this note appear on Benton's December 31,2015 balance sheet?

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The Answer of On December 31,2014,Benton Company sold equipment to Cleveland,Inc.,accepting a $400,000 non-interest bearing note receivable in full payment.The note is due on December 31,2017.Cleveland,Inc.normally pays 10% for its borrowed funds.The equipment is carried in Benton's perpetual inventory records at 50% of its cash selling price.The present value of $1 to be received n periods in the future = 1 ÷ (1 + r)ⁿ where r is the rate of interest per period. Required: a.Prepare Benton's journal entries to record the sale on December 31,2014. b.Prepare Benton's journal entry on December 31,2015 necessitated by this transaction. c.At what amount would this note appear on Benton's December 31,2015 balance sheet?

On December 31,2014,Benton Company Sold Equipment to Cleveland,Inc