On December 31, 2012, Flint Corporation sold for $100,000 an old machine having an originalcost of $180,000 and a book value of $80,000. The terms of the sale were as follows:$20,000 down payment$40,000 payable on December 31 each of the next two yearsThe agreement of sale made no mention of interest; however, 9% would be a fair rate for thistype of transaction. (The present value of an ordinary annuity of 1 at 9% for 2 years is 1.75911.)Prepare the journal entry to record the sale of the machine.
40,000 x 1.75911 = $70,364 PV of note receivable Dr Cash 20,000 Dr Notes Receivable 70,364 Dr Accumulated Depreciation--Machine 100,000 Cr Machine 180,000 Cr Gain on Disposal 10,364
