QUESTION 28 Illustration 28–Advance payment and assessment of discount rate ST Limited enters into a contract with a customer to sell an asset. Control of the asset will transfer to the customer in two years (i.e. the performance obligation will be satisfied at a point in time). The contract includes two alternative payment options: 1) Payment of $ 5,000 in two years when the customer obtains control of the asset or 2) Payment of $ 4,000 when the contract is signed. The customer elects to pay $ 4,000 when the contract is signed. ST Limited concludes that the contract contains a significant financing component because of the length of time between when the customer pays for the asset and when the entity transfers the asset to the customer, as well as the prevailing interest rates in the market. The interest rate implicit in the transaction is 11.8 per cent, which is the interest rate necessary to make the two alternative payment options economically equivalent. However, the entity determines that, the rate that should be used in adjusting the promised consideration is 6%, which is the entity's incremental borrowing rate. Pass journal entries showing how the entity would account for the significant financing component