Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the...

Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the purchase call for Right Now to take delivery of the equipment on June 1 , 2016 upon transfer of $50,000 to ARCSOFT on that same day. Additional payments of $200,000 is to be paid by Right Now to ARCSOFT on June 1, 2017 and June 1, 2018. The equipment will be usable upon delivery with no further involvement by ARCSOFT. Both companies only make adjusting entries at the end of the year. The normal borrowing rate for Right Now is 8%.

What journal entries should Right Now and ARCSOFT make on:

June 1, 2016

Dec 31, 2016

Dec 31, 2017

June 1, 2018

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ekkarill92 answered 1 year ago

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