Question: On December 31, 2013 Elastigirl Corporation sold some of its product to Edna Company, accepting a four-year note bearing 3% stated annual interest rate and having a maturity value of $800,000. Interest is paid annually on December 31st). the Elastigirl Corporation usually pays 6% for its borrowed funds. Edna Company, however, usually pays 8% for its borrowed funds. the product sold to Edna originally cost Elastigirl $495,000 to manufacture. Assume Elastigirl uses a perpetual inventory system.
Required: 1. Prepare the journal entries for Elastigirl Corporation to record the transaction at December 31, 2013.
2. Make all appropriate entries for 2014 on the books of Elastigirl Corporation.