Prepare the journal entries for this transaction

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Question - You are a manufacturer of heavy machinery and are a publicly accountable entity. On December 31, 20x0, you made a sale of a piece of equipment to a customer. You estimate that your customer's incremental borrowing rate is 6%. Your incremental borrowing rate is 5%. For each of the following terms of payment, prepare the journal entries for this transaction for the years ended December 31, 20x0, 20x1 and 20x2.

The customer will pay $400,000 on December 31, 20x2 and pay no interest in the interim. The cash sales price of the turbine would be $350,000.

Reference no: EM132544409

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