On December 31, 2022, Hurly Co. performed environmental consulting services for Cascade Co. Cascade was short of cash, and Hurly Co. agreed to accept a $300,000 zero-interestbearing note due December 31, 2024, 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, 2022, for Hurly Co.

b. Assuming Hurly Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2023.

c. Assuming Hurly Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2024.