Question
On December 31, 2017, Wildhorse Co. sold equipment to Windsor, Inc. Wildhorse Co. agreed to accept a $630,000 zero-interest-bearing note due December 31, 2019, as
On December 31, 2017, Wildhorse Co. sold equipment to Windsor, Inc. Wildhorse Co. agreed to accept a $630,000 zero-interest-bearing note due December 31, 2019, as payment in full. Windsor, Inc. incorporated in 2017 and had very little credit history at the time of the transaction with Wildhorse. Therefore, at that time, Windsor typically borrowed funds at a rate of 10%. Wildhorse has a long and positive credit history. Therefore, Wildhorse has various lines of credit at 4%.
1.) Prepare the journal entry to record the transaction of December 31, 2017, for Wildhorse Co.
2.) Assuming Wildhorse Co.s fiscal year-end is December 31, prepare the journal entry for December 31, 2018.
3.) Assuming Wildhorse Co.s fiscal-year end is December 31, prepare the journal entries for December 31, 2019.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started