Mercury Ltd. has sold goods to Mars Ltd. at a consideration of 10 lakhs, the receipt of which receivable in three equal installments of 3,33,333…

Mercury Ltd. has sold goods to Mars Ltd. at a consideration of 10 lakhs, the receipt of which receivable in three equal installments of 3,33,333 over a two-year period (receipts on 1st April, 20X1, 31st March, 20X2 and 31st March, 20X3). The company is offering a discount of 5% (i.e.50,000) if payment is made in full at the time of sale. The sale agreement reflects an implicit interest rate of 5.36% p.a. The total consideration to be received from such sale is at 10 lakhs and hence, the management has recognised the revenue from sale of goods for 10 lakhs. The revenue from sale of goods on 1st April, 20X1 will be recognized at-