On 1 March 20X1, Pellan buys reels of cable. The price for settlement on normal credit terms is 50,000; Pellan obtains the right to pay 52,000 on 31 August 20X1, a deferral that effectively contains a financing element. The reporting period ends on 31 December 20X1. Ignoring VAT and the final settlement, record the entry for the receipt into inventory and the entry for the interest expense of the period.
- Price for normal credit terms
- 50,000
- Amount paid on 31 August 20X1
- 52,000