Question

On December 31, 2020, Blue Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Blue Co. agreed to accept a $322,700 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 10%. Blue is much more creditworthy and has various lines of credit at 6%.

Prepare the journal entry to record the transaction of December 31, 2020, for the Blue Co.

Assuming Blue Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2021.

Assuming Blue Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2022.

Answer 1

Aass Dec B12020 323 100 Notes Reaivable 266 t11.55 Servile D'stount mNoles Ruaivables Reuenue 355988.ur Prexnt value of Noles Recoivable rs $B22t00 x PVE CI0, 2yur) 3a2t00 x 0. 8265 end is Fiscal Dec 31,2013 he yeat Notes Discount $9661.16 Reaivable Intreut revenue lo C26611 55) ( Dec 31,20ly Discount No les Reaivab le 3nterest revenue $ २१३।१-५ऽ a931145 CBalanu of Disernt charged to interest Orovenue)

0 Notes Collectin Recavable Cash lRank 322100 Notes Receiuable 322100 Totes Recoiunblas being Qaoivabla in feture, therefere al he hme hawe to ourad k rent Vale Serviie cue ddd along with disurnt arol discaul nadd be chargid o ntrest veuenue