The following transactions took place for Smart Solutions Inc. 2014 a. July 1 Lo
ID: 2465550 • Letter: T
Question
The following transactions took place for Smart Solutions Inc. 2014 a. July 1 Loaned $61,000 to an employee of the company and received back a one-year, 9 percent note. b. Dec. 31 Accrued interest on the note. 2015 c. July 1 Received interest on the note. (No interest has been recorded since December 31.) d. July 1 Received principal on the note. Required: Prepare the journal entries that Smart Solutions Inc. would record for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Explanation / Answer
journal entries
july 1 2014 1. loan to employee a/c dr $ 61,000
to cash a/c $ 61,000
( being loan given to employee)
dec 31.2014 2. interest recivable a/c dr $ 2,745
to interest a/c $ 2,745
( being accrued interest recivable)
july 1.2015 3. cash a/c dr $ 5,490
to interest receivable a/c $ 2,745
to interest a/c $ 2,745
( being interest amount received )
july 1 2015 4 . cash a/c dr $ 61,000
to loan to employee a/c $ 61,000
( being loan recoverd from employee)
to loan to
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