South Company, a public company, sells large construction equipment. On 1 January 20X5, the company...
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South Company, a public company, sells large construction equipment. On 1 January 20X5, the company sold North Company a machine at a quoted price of $152,000. South collected $56,000 cash and received a two-year note payable for the balance. Required: 1. Give Souths required entries for the two years, assuming an interest-bearing note, face value $96,000 (8% interest, simple interest, payable every 31 December and 8% market rate). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Assume that the market interest rate is still 8%. Give Souths required entries for the two years, assuming a 2% interest-bearing note, face value $96,000. Prepare the entries based on the gross basis. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3. Compare the interest revenue and sales revenue under requirements 1 and 2
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