Question

On December 31, 2020, Riverbed Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Riverbed Co. agreed to accept a $281,500 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 11%. Riverbed is much more creditworthy and has various lines of credit at 6%. Prepare the journal entry to record the transaction of December 31, 2015, for the Riverbed Co.

Answer 1

Riverbed Co. Journal. $

December 31 202

Hayduke Co. Dr 281,500

Services Cr 281,500

Narration . records of services render on credit to Hayduke Co.

Step-by-step explanation:

The journal do not take cognizance of interest payment since the note is a free of interest and in the same vein there credit ratings have nothing to do with this transaction.