On December 31, 2019, Hurly Co. performed environmental consulting services for Cascade Co. Cascade was short of cash, and Hurly Co. agreed to accept a $300,000 zero-interest-bearing note due December 31, 2021, as payment in full. Cascade is somewhat of a credit risk and typically borrows funds at a rate of 10%. Hurly is much more creditworthy and has various lines of credit at 6%.
Instructions
a. Prepare the journal entry to record the transaction of December 31, 2019, for Hurly Co.
b. Assuming Hurly Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2020.
c. Assuming Hurly Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2021.