Question
On December 31, 2015, Pronghorn Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Pronghorn Co. agreed to accept a
On December 31, 2015, Pronghorn Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Pronghorn Co. agreed to accept a $324,900zero-interest-bearing note due December 31, 2017, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of11%. Pronghorn is much more creditworthy and has various lines of credit at 6%.
a. Prepare the journal entry to record the transaction of December 31, 2015, for the Pronghorn Co.
b. Assuming Pronghorn Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2016.
c. Assuming Pronghorn Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2017.
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Managerial Accounting A Focus on Ethical Decision Making
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
5th edition
978-0324663853
