These transactions took place for Renda Co. 2011 May 1 Received a $5,000, 1-year

Question

These transactions took place for Renda Co. 2011 May 1 Received a $5,000, 1-year, 6% note in exchange for an outstanding account receivable from S. Dorsey. Dec 31 Accrued interest revenue on the S. Dorsey note. 2012 May Received principal plus interest on the S. Dorsey note. (No interest has been accrued since December 31, 2011.) Record the transactions in the general journal.

Explanation / Answer

5/1/11 Notes Receivable 5000 >>>Accounts Receivable 5000 12/31/11 Interest Receivable 200 ($5000*0.06*(8/12)) >>>Interest Revenue 200 5/1/12 Cash 5200 >>>Notes Receivable 5000 >>>Interest Receivable 200 (Would be $300 if interest had been accrued since December...accruing the additional 4/12 months of the year, and there would be an entry like that of decembers to accrue that interest...its odd that this problem denotes that no interest was accrued during that period)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.