On December 31, 2014, Fenton Company sold equipment to Denver, Inc., accepting a $275,000 noninterest-bearing note receivable

Question:

On December 31, 2014, Fenton Company sold equipment to Denver, Inc., accepting a $275,000 noninterest-bearing note receivable in full payment on December 31, 2017. Denver, Inc., normally pays 12% for its borrowed funds. The equipment is carried in Fenton’s perpetual inventory records at 65% of its cash selling price.

Required:
1. Prepare Fenton’s journal entries to record the sale on December 31, 2014.
2. Prepare Fenton’s journal entry on December 31, 2015, necessitated by this transaction.
3. Show Fenton’s presentation of Denver’s note at December 31, 2015.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...