Determine Price - Learning Question
On 1 January 20X1 Cow got into a contract to build a machine for a customer
It will take 2 years and then given to the customer
The customer can pay $30 million on delivery (2 years time) or
pay $25.72 million immediately. (The interest rate implicit in the contract is 8%)
Required:
Explain the accounting entries required to recognise the transaction at the end of year 1 and 2 if customer chooses to pay immediately