Exercise 7-13 Honoring a note LO P4 Following are selected transactions for Vita

Question

Exercise 7-13 Honoring a note LO P4 Following are selected transactions for Vitalo Company. Nov. 1 Accepted a $10,000, 180-day, 9% note dated November 1 from Kelly White in granting a time extension on her past- Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note. due account receivable. Apr. 30 White honored her note when presented for payment; February has 28 days for the current year. Complete the table to calculate the interest amounts at Decembe 3St and April 30th and use those calculated values to prepare your journal entries (assume that no reversing entries are recorded). (Do not round intermediate calculations. Use 360 days a year.) Complete this question by entering your answers in the tabs below. Interest Amounts General Journal Complete the table to calculate the interest amounts at December 31st and April 30th, November 1 January 1 Through Through April 30 Total Through Maturity December 31 Principal Rate (%) Time Total interest

Explanation / Answer

1-Nov 1-Jan Total Through Maturity Through Dec 31 Through April 30 Principal 10000 10000 10000 Rate (%) 9% 9% 9% Time 180 days 60 days 60 days Total Interest 450 150 300 Date Account title and explanation Debit Credit 1-Nov Note Receivable 10000 Accounts Receivable 10000 (To record Note receivable acceptance) 31-Dec Interest Receivable 150 Interest Revenue 150 (To record interest Revenue accrued) 30-Apr Cash 10450 Interest Receivable 150 Interest Revenue 300 Note Receivable 10000 (To record honour of note)

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