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On December 31, 20x2, Pereira Corporation sold for $40,000 an old machine having an original...

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Accounting

On December 31, 20x2, Pereira Corporation sold for $40,000 an old machine having an original cost of $60,000 and a book value of $21,000. The terms of the sale were as follows: a) $20,000 down payment. b) $10,000 payable on December 31 for each of the next two years. The agreement of sale made no mention of interest; however, 10 percent would be a fair rate for this type of transaction. Required - 1. Prepare the entry to record the sale on December 31, 20x2. 2. Prepare the entry to record the receipt of $10,000 on December 31, 20x3 and on December 31, 20x4.

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