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Question: On December 31, 2015, Riverbed Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Riverbed Co. agreed to accept a $298,600 zero-interest-bearing note due December 31, 2017, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 10%. Riverbed is much more creditworthy and has various lines of credit at 6%.
A) Prepare the journal entry to record the transaction of December 31, 2015, for the Riverbed Co.
B) Assuming Riverbed Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2016.
The Franklins sued, claiming that the FLB attorney had authority to settle the case and that FLB was bound by the settlement agreement. How should the court rule? Discuss fully.
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