These transactions took place for Glavine Co. 2013 1. May 1 Received a $6,200, 1

Question

These transactions took place for Glavine Co. 2013 1. May 1 Received a $6,200, 12-month, 7% note in exchange for an outstanding account receivable from S. Rooney. 2. Dec. 31 Accrued interest revenue on the S. Rooney note. 2014 3. May 1 Received principal plus interest on the S. Rooney note. (No interest has been accrued since December 31, 2013.) Record the transactions in the genera! journal. The company does not make entries to accrue interest except at December 31 (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,250.)

Explanation / Answer

May 1 7% Note Receivable account ................Dr 6200

To S. rooney 6200

( Being note exchange in return of account receivable)

31Dec Interest Receivable account .....................Dr ( 6200*7%*8/12) 290

To Interest Income 290

( Being interest accrued for 6 months )

Cash / Bank account ..........................Dr 6634

To Interest Receivable 290

To Note Receivable 6200

To Interest income

( Being interest booked and interest received )

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