Elburn Supply Co. has the following transactions related to notes receivable dur

Question

Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2017. The company does not make entries to accrue interest except at December 31.

Record the collection of the Lopez note at its maturity in 2018.

Nov. 1 Loaned $17,250 cash to Manny Lopez on a 12-month, 8% note. Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $30,000, 90-day, 6% note. 16 Received a $20,160, 180 day, 10% note in exchange for Joe Fernetti’s outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable. Date Account Titles and Explanation Debit Credit Nov. 1 Notes Receivable 17,250 Cash 17,250

Explanation / Answer

Journal entry :

Date account title and explanation debit credit Nov 1 Cash 18630 Notes receivable 17250 Interest receivable 230 Interest revenue 1150 (To record collection)

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