On January 1, 2018, Happy Tubs sold a hot tub to Monica, receiving a two-month, noninterest-bearing note in exchange for a hot tub that normally sells for $8,000. The note is for an amount that achieves an effective interest rate of 10% per year, and Happy Tubs views the financing component of this transaction to be significant.
Required:
1. Prepare the journal entry to record the sale.
2. Prepare any adjusting entry necessary on December 31, 2018.
3. Prepare any adjusting entry necessary on December 31, 2019.
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