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On December 31, 2020, Whispering Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Whispering Co. agreed to accept a $287,800 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 10%. Whispering is much more creditworthy and has various lines of credit at 6%.

On December 31, 2020, Whispering Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Whispering Co. agreed to accept a $287,800 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 10%. Whispering is much more creditworthy and has various lines of credit at 6%.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2020, Whispering Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Whispering Co. agreed to accept a $287,800 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 10%. Whispering is much more creditworthy and has various lines of credit at 6%. Prepare the journal entry to record the transaction of December 31, 2020, for the Whispering Co. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Dec. 31, 2020 Date Dec. 31, 2021 Assuming Whispering 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 O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Date Dec. 31, 2022 Account Titles and Explanation Account Titles and Explanation Debit Assuming Whispering 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 O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (To record interest revenue) (To record collection of note) Debit Credit Debit Credit Credit
Transcribed Image Text:On December 31, 2020, Whispering Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Whispering Co. agreed to accept a $287,800 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 10%. Whispering is much more creditworthy and has various lines of credit at 6%. Prepare the journal entry to record the transaction of December 31, 2020, for the Whispering Co. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Dec. 31, 2020 Date Dec. 31, 2021 Assuming Whispering 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 O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Date Dec. 31, 2022 Account Titles and Explanation Account Titles and Explanation Debit Assuming Whispering 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 O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (To record interest revenue) (To record collection of note) Debit Credit Debit Credit Credit
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