Question - Whitelock Ltd sells a machine for making rugby balls to the Australian Rugby Union on 1 July 2017. The machine normally sells for $110,000, but to support rugby in Australia Whitelock Ltd agrees to payment terms of 5 annual payments (in arrears) of $26,379.75. The borrowing rate for the Australian Rugby Union is 10%.
Required: For Whitelock Ltd you are required to:
1. Prepare the journal entry on 1 July 2017 to record the sale.
2. Prepare the journal entry on 30 June 2018 when the first annual payment is made.