Wagner income statement-second year of the contract


Wagner Company sold some machinery to Granger Company on January 1, 2007. The cash selling price would have been $568,620. Granger entered into an installment sales contract which required annual payments of $150,000, including interest at 10%, over five years. The first payment was due on December 31, 2007. What amount of interest income should be included in Wagner's 2008 income statement (the second year of the contract)?

A. $41,862

B. $15,000

C. $47,548

D. $30,000

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Accounting Basics: Wagner income statement-second year of the contract
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