On December 31, 2014, Fraser Co. sold cars to Center City for its transit system for $5,000,000. Center City is going to pay the amount in full in 5 years, on January 2, 2020. They are not going to pay any interest during the 5 years or at the end. The current rate of interest on similar loans is 10%.
A) How much revenue would Fraser record for the sale on December 31, 2014?
B) What will be the amount and classification of the receivable on the December 31, 2014 balance sheet?
C) What will be the financing income from the sale over the time that the receivable is outstanding?
D) How much interest revenue will be recorded in 2015?