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Prepare journal entry to record transaction of December

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Question - On December 31, 2017, Ivanhoe Co. sold equipment to Metlock, Inc.

Ivanhoe Co. agreed to accept a $670,000 zero-interest-bearing note due December 31, 2019, as payment in full.

Metlock, Inc. incorporated in 2017 and had very little credit history at the time of the transaction with Ivanhoe.

Therefore, at that time, Metlock typically borrowed funds at a rate of 8%.

Ivanhoe has a long and positive credit history. Therefore, Ivanhoe has various lines of credit at 4%.

a) Prepare the journal entry to record the transaction of December 31, 2017, for Ivanhoe Co.

b) Assuming Ivanhoe Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2018.

c) Assuming Ivanhoe Co.'s fiscal-year end is December 31, prepare the journal entries for December 31, 2019.

Reference no: EM132429334

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