On December 31, 2017, Pharoah Co. sold equipment to Shamrock, Inc. Pharoah Co. agreed to accept a $590,000 zero-interest- bearing note due December 31, 2019, as payment in full. Shamrock, Inc. incorporated in 2017 and had very little credit history at t time of the transaction with Pharoah. Therefore, at that time, Shamrock typically borrowed funds at a rate of 12%. Pharoah has a and positive credit history. Therefore, Pharoah has various lines of credit at 4%.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On December 31, 2017, Pharoah Co. sold equipment to Shamrock, Inc. Pharoah Co. agreed to accept a $590,000 zero-interest-
bearing note due December 31, 2019, as payment in full. Shamrock, Inc. incorporated in 2017 and had very little credit history at th
time of the transaction with Pharoah. Therefore, at that time, Shamrock typically borrowed funds at a rate of 12%. Pharoah has a lo
and positive credit history. Therefore, Pharoah has various lines of credit at 4%.
(a)
- Your answer is partially correct.
Prepare the journal entry to record the transaction of December 31, 2017, for Pharoah Co. (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 fo
the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124.)
Account Titles and Explanation
Debit
Credit
Notes Receivable
Sales Revenue
Transcribed Image Text:On December 31, 2017, Pharoah Co. sold equipment to Shamrock, Inc. Pharoah Co. agreed to accept a $590,000 zero-interest- bearing note due December 31, 2019, as payment in full. Shamrock, Inc. incorporated in 2017 and had very little credit history at th time of the transaction with Pharoah. Therefore, at that time, Shamrock typically borrowed funds at a rate of 12%. Pharoah has a lo and positive credit history. Therefore, Pharoah has various lines of credit at 4%. (a) - Your answer is partially correct. Prepare the journal entry to record the transaction of December 31, 2017, for Pharoah Co. (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 fo the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124.) Account Titles and Explanation Debit Credit Notes Receivable Sales Revenue
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