Question1 On January 2, 2017, Stellar Inc. sells goods to Geo Company in exchang

Question

Question1 On January 2, 2017, Stellar Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with face value of $9,000, with payment due in 12 months. The fair value of the goods at the date of sale is $8,100 (cost $4,860) Prepare the journal entry to record this transaction on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required select "No entry" for the account titles and enter O for the amounts.) Dsle Aecount Tiles and Explasati an 2, 2017 To rocord sales To record cost of goods sold How much total revenue should be recognized in 2017? Total revernues

Explanation / Answer

Journal Entries Date Account Title and explanation Debit Credit Jan, 02 2017 Zero-interest - bearing note $                     9,000         To Sales $                       9,000 (To Record the sale on zero interest rate bearing note) Jan, 02 2017 Cost of goods sold $                     4,860       To Merchandise $                       4,860 (To Record the cost of Goods Sold CALCULATION OF THE PROFIT FOR THE YEAR 2017 Sales = $                     9,000 Less: Cost of Goods Sold $                     4,860 Profit $                     4,140 Answer = $ 4,140

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