On January 1, 2024, Chopin Tubs sold a hot tub to Amadeus, receiving a two-year,...
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Accounting
| On January 1, 2024, Chopin Tubs sold a hot tub to Amadeus, receiving a two-year, noninterest-bearing note in exchange for a hot tub that normally sells for $10,000. The note requires payment of $12,100 on December 31, 2025. A rate of 10% is appropriate for this situation. Chopin Tubs views the financing component of this transaction to be significant. |
| Required: | 15 points | ||
| 1. Prepare the journal entry to record the sale. | |||
| 2. Prepare any adjusting entries necessary on December 31, 2024. | |||
| 3. Prepare any adjusting entries necessary on December 31, 2025 | |||
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