Prepare the journal entries that m should make


On December 31, 2010, M Company sold some inventory to X Company in exchange for a $25,000 10% note receivable. The note principal will be collected as follows - $5,000 on December 31, 2011, $10,000 on December 31, 2012 and $5,000 on December 31, 2013. Interest will be collected every December 31 starting December 31, 2011. Under normal market conditions, M would only accept a note with a stated rate of 12%. The cost of the inventory sold was $10,000. Prepare the journal entries that M should make on 12-31-10, 12-31-11, 12-31-12, and 12-31-13.

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Accounting Basics: Prepare the journal entries that m should make
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