*Accounting for notes receivable transactions Following are transactions of The
ID: 2419917 • Letter: #
Question
*Accounting for notes receivable transactions
Following are transactions of The Barnett Company (round the answer to two decimal places):
2014
Dec. 16 - Accepted a $22,000, 60-day, 5% note dated this day in granting Carmel Karuthers a time extension on her past-due account.
31 - Made an adjusting entry to record the accrued interest on the Karuthers note.
31 - Closed the Interest Revenue account.
2015
Feb. 14 - Received Karuthers' payment for the principal and interest on the note dated December 16.
Mar. 2 - Accepted an $8,000, 4%, 90-day note dated this day in granting a time extension on the past-due account of ATW Company.
17 - Accepted a $3,200, 30-day, 4.5% note dated this day in granting Leroy Johnson a time extension on his past-due account.
May. 31 - Received ATW's payment for the principal and interest on the note dated March 2.
-Required: Prepare journal entries to record The Barnett Company's transactions.
Explanation / Answer
Barnett Company Journal Entries Date Account Title Dr $ Cr $ Dec 16.2014. Notes Receivable-Carmel K. 22,000 Accounts Receivable 22,000 (recording the Notes receivable) Dec31.2014. Interest Receivable 45 Interest Income 45 ( Accruing Interest revenue for 15 days , considering 365 day year) Feb 14.2015. Cash 22,181 Interest Receivable 45 Interest Income 136 Notes Receivable-Carmel K. 22,000 (receipt of interest & Notes receivable ) Mar 2.2015. Notes Receivable-ATW 8,000 Accounts Receivable 8,000 (recording the Notes receivable) Mar 17.2015. Notes Receivable-Leroy Johnson 3,200 Accounts Receivable 3,200 (recording the Notes receivable) May 31.2015. Cash 8,079 Interest Income 79 Notes Receivable-ATW 8,000 (receipt of interest & Notes receivable )
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