Problem
On December 31, 2016, Green Company finished consultation services and received a promissory note with a face value of 800,000, a due date of December 31, 2019, and a stated rate of 5% with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed interest rate of 10%.
a) Prepare the journal entry recorded by Green Company at December 31, 2016
b) Prepare the journal entry, if any, to be recorded by Green company at December 31, 2017
c) Prepare the journal entry, if any, to be recorded by Green company at December 31, 2018
d) Prepare the journal entry, if any, to be recorded by Green company at December 31, 2017