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17 January, 02:50

On March 1, 2020, Pronghorn Company sold goods to Goosen Inc. for $600,000 in exchange for a 5-year, zero-interest-bearing note in the face amount of $923,174 (an inputed rate of 9%). The goods have an inventory cost on Pronghorn's books of $368,000. (a) Prepare the journal entries for Pronghorn on March 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

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  1. 17 January, 03:44
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    a.

    March 1, 2020

    Dr Notes Receivable 923,174

    Cr Discount on Notes Receivable 323,174

    Cr Sales Revenue 600,000

    Dr Cost of Goods Sold 368,000

    Cr Inventory 368,000

    b.

    December 31, 2020

    Dr Discount on Notes Receivable 45,000

    Cr Interest Revenue 45,000

    Explanation:

    Pronghorn Company Journal entries

    a.

    March 1, 2020

    Dr Notes Receivable 923,174

    Cr Discount on Notes Receivable 323,174

    Cr Sales Revenue 600,000

    Dr Cost of Goods Sold 368,000

    Cr Inventory 368,000

    b.

    December 31, 2020

    Dr Discount on Notes Receivable 45,000

    Cr Interest Revenue (9% X $600,000 X 10/12) 45,000
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