Exercise 8-7 Malone Supply Co. has the following transactions related to notes r

Question

Exercise 8-7 Malone Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. 1. Loaned $60,900 cash to B. Carr on a 12-month, 8% note. 2 Sold goods to R. P. Kiner, Inc., receiving a $3,000, 90-day, 9% note. 3 . Received a $11,900, 180-day, 9% note to settle an open account from M. Adcock. 4. Accrued interest revenue on all notes receivable. Journalize the transactions for Malone Supply Co. (Credit account titles are automatically indented when amount s entered. Do not indent manually. Round answers to O decimal places, e.g. 5,250.)

Explanation / Answer

note1 : 60900*.08*2/12 = 812

note 2 : 3000*.09*21/360 = 15.75

note3 : 11900*.09*16/360 = 47.60

Total Interest : 875.35 (apporx875)

Date Title Debit credit nov 1 Note receivable 60900 cash 60900 [being Loan made] dec11 Note receivable 3000 sales 3000 [being sales made and note received] dec16 Note receivable 11900 Accounts receivable 11900 [being Note received from receivable due] dec31 Interest receivable 875 Interest revenue 875 [being Interets accrued but not received]

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