Question 1 Blossom Corp. sells idle machinery to Enyart Company on July 1, 2017,

Question

Question 1

Blossom Corp. sells idle machinery to Enyart Company on July 1, 2017, for $28,000. Blossom agrees to repurchase this equipment from Enyart on June 30, 2018, for a price of $29,400 (an imputed interest rate of 5%).

(a)

Account Titles and Explanation

Debit

Credit

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SUBMIT ANSWER

(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

(c)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Question 1

Blossom Corp. sells idle machinery to Enyart Company on July 1, 2017, for $28,000. Blossom agrees to repurchase this equipment from Enyart on June 30, 2018, for a price of $29,400 (an imputed interest rate of 5%).

(a)

Prepare the journal entry for Blossom for the transfer of the asset to Enyart on July 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Attempts: 0 of 2 used

SAVE FOR LATER

SUBMIT ANSWER

(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

(c)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Explanation / Answer

SOLUTION

(A)

Date Accounts title and Explanation Debit ($) Credit ($) July 1, 2017 Cash 28,000 Repurchase Obligation 28,000 (To record the transfer of the asset to Enyart)

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