Prepare the journal entry to record the transaction

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Reference no: EM13790238

On December 31, 2012, Ed Abbey Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Abbey Co. agreed to accept a $250,300 zero-interest-bearing note due December 31, 2014, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 10%. Abbey is much more creditworthy and has various lines of credit at 6%.

1. Prepare the journal entry to record the transaction of December 31, 2012, for the Ed Abbey Co.

2. Assuming Ed Abbey Co.s fiscal year-end is December 31, prepare the journal entry for December 31, 2013.

3. Assuming Ed Abbey Co.s fiscal year-end is December 31, prepare the journal entry for December 31, 2014. (Two entries- To Record Interest Revenue and To Record Collection of Note).

Reference no: EM13790238

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