Question

On December 31, 2020, Carla Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Carla Co. agreed to accept a $318,100 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 11%. Carla is much more creditworthy and has various lines of credit at 5% - Your answer is partially correct. Prepare the journal entry to record the transaction of December 31, 2020, for the Carla Co. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Dec. 31, Notes Receivable 2020 318,000 Discount on Notes Receivable 59,930 Service Revenue 258,170

Answer 1

solution Ent Da 31, December entry: Prelaration of Journal entry to record the transaction December 31.2020 Date Account title and explanation Debit(s) credit(& 3,18,100 2020 Discount on notes 59,923 receivedlo service revenue 2,58.177 (To recond service devenue) Notes receivable Note I computation of Present valio of Note Pacevalue (tigh 3,18,100 - 3,18.100 (1.117² 1.2321 entry: 2 Date Dec 31, 2021 - 9.58.147 Preparation of Journal entry for December 31, 201 Account title and explanation Debit (8) Credit (8) Discount on notes receivable 28 399 (2.58.147*1.) Interest revence 28.399 (To record interest revenue) Ce feed

Entry - Prelaration of Journal entry fon December 31,2022 Date Account titles and explanation Debit (8) credit(K) Discount on Notes receivable 31,523 Interest revenue 31,523 (To record onterest revenue) (9.58,177728,399)x1y. cash 3,18,100 Notes receivable 3,18,100 Cto record collection of pote)