On 1 July 2013 Bryson Plc Sells a Machine to Adams

On 1 July 2013 Bryson Plc sells a machine to Adams Plc in exchange for a promissory note that requires Adams Plc to make five payments of €8000,the first to be made on 30 June 2014.The machine cost Bryson Plc €20 000 to manufacture.Bryson Plc 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%.What are the appropriate journal entries to record the sale agreement and the first two instalments using the net-interest method?

A) $\begin{array}{|c|l|l|l|}\hline 1 \text { July } 2013 & & \\\hline \mathrm{Dr} & \text { Note receivable } &40000 & \\\hline \mathrm{Cr} & \text { Sales } & &40000 \\\hline & && \\\hline \mathrm{Dr} & \text { Cost of sales } & 20000& \\ \hline \mathrm{Cr} & \text { Inventory }&&20000\\\hline & && \\\hline {\text { J0 June } 2014} & & \\\hline \mathrm{Dr} & \text { Cash } & 8000 & \\\hline \mathrm{Cr} & \text { Note receivable } & & 8000 \\\hline & & & \\\hline 30 \text { June } 2015 & & \\\hline \mathrm{Dr} & \text { Cash } &8000 & \\\hline \mathrm{Cr} & \text { Note receivable } & &8000\\\hline\end{array}$
B) $\begin{array}{|c|l|r|r|}\hline {\text { July } 2013} & \\\hline \mathrm{Dr} & \text { Note receivable } & 30326 & \\\hline \mathrm{Cr} & \text { Sales } & & 30326 \\\hline & & & \\\hline \mathrm{Dr} & \text { Cost of sales } & 20000 & \\\hline \mathrm{Cr} & \text { Inventory } & & 20000 \\\hline\\\hline 30 \text { June } 2014 & & \\\hline \mathrm{Dr} & \text { Cash } & 8000 & \\\hline \mathrm{Cr} & \text { Note receivable } & & 4967 \\\hline \mathrm{Cr} & \text { Interest revenue } & & 3033 \\\hline\\\hline {30 \text { June } 2015} & & \\\hline \mathrm{Dr} & \text { Cash } & 8000 & \\\hline \mathrm{Cr} & \text { Note receivable } & & 5464 \\\hline \mathrm{Cr} & \text { Interest revenue } & & 2536 \\\hline\end{array}$

C) $\begin{array}{|c|l|r|r|}\hline 1 \text { July } 2013 \\\hline \mathrm{Dr} & \text { Note receivable } & 20000 & \\\hline \mathrm{Cr} & \text { Sales } & & 20000 \\\hline & & & \\\hline 30 \text { June } 2014 & & \\\hline \mathrm{Dr} & \text { Cash } &8000 & \\\hline \mathrm{Cr} & \text { Note receivable } & & 2000\\\hline \mathrm{Cr} & \text { Interest revenue } & & 6000\\\hline\\\hline 30 \text { June } 2015 & & \\\hline \mathrm{Dr} & \text { Cash } & 8000 & \\\hline \mathrm{Cr} & \text { Note receivable } & & 1800 \\\hline \mathrm{Cr} & \text { Interest revenue } & & 6200 \\\hline\end{array}$

D) $\begin{array}{l}1 \text { July } 2013\\\begin{array}{|l|l|l|l|}\hline \mathrm{Dr} & \text { Note receivable } & 30326 & \\\hline \mathrm{Cr} & \text { Sales } & & 30326 \\\hline & & & \\\hline \mathrm{Dr} & \text { Cost of sales } & 20000 & \\\hline \mathrm{Cr} & \text { Inventory } & & 20000 \\\hline\\\hline{30 \text { June } 2014} & & \\\hline \mathrm{Dr} & \text { Cash } & 8000 & \\\hline \mathrm{Cr} & \text { Interest revenue } & & 4967 \\\hline \mathrm{Cr} & \text { Note receivable } & & 3033 \\\hline\\\hline 30 \text { June } 2015 & & \\\hline \mathrm{Dr} & \text { Cash } & 8000 & \\\hline \mathrm{Cr} & \text { Interest revenue } & & 5464 \\\hline \mathrm{Cr} & \text { Note receivable } & & 2536 \\\hline\end{array}\end{array}$