Question

On December 31, 2020, Oriole Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Oriole Co. agreed to accept a $346,500 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%. Oriole is much more creditworthy and has various lines of credit at 6%.

Partially correct answer iconYour answer is partially correct.

Prepare the journal entry to record the transaction of December 31, 2020, for the Oriole 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 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020

eTextbook and Media

Assistance Used

List of Accounts

  

  

Partially correct answer iconYour answer is partially correct.

Assuming Oriole Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2021

eTextbook and Media

List of Accounts

  

  

Partially correct answer iconYour answer is partially correct.

Assuming Oriole Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2022. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2022
	(To record interest revenue)
	(To record collection of note)

Answer 1

Date	Accounting Titles and Explanations	Debit	Credit
Dec. 31, 2020	Notes receivable	$346,500
	Discount on notes receivable		$65274
	Sales revenue (346500*0.81162)		281226
Dec. 31, 2021	Discount on notes receivable	30935
	Interest revenue (281226*11%)		30935
Dec. 31, 2022	Discount on notes receivable	34339
	Interest revenue (65274-30935)		34339
	(To record interest revenue)
	Cash	$346,500
	Notes receivable		$346,500
	(To record collection of note)