Exercise 8-10 Elburn Supply Co. has the following transactions related to notes
ID: 2474316 • Letter: E
Question
Exercise 8-10 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. Nov. 1 Loaned $14,000 cash to Manny Lopez on a 12-month, 12% note. Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $28,800, 90-day, 10% note. 16 Received a $28,600, 180 day, 12% note in exchange for Joe Fernetti’s outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable.
A. Journalize the transactions for Elburn Supply Co. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Use 360 days for calculation. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)
B. Record the collection of the Lopez note at its maturity in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Explanation / Answer
Date
Account
Debit
Credit
Nov 1
Loan Receivable
14000
Cash
14000
Dec 11
Note Receivable
28800
To Sale
28800
Dec 16
Note Receivable
28600
Outstanding accounts receivable
28600
Dec 31
Accrued Interest
1257
Interest Income
1257
2018
Oct 31
Cash
15680
Note Receivable
14000
Interest
1680
Date
Account
Debit
Credit
Nov 1
Loan Receivable
14000
Cash
14000
Dec 11
Note Receivable
28800
To Sale
28800
Dec 16
Note Receivable
28600
Outstanding accounts receivable
28600
Dec 31
Accrued Interest
1257
Interest Income
1257
2018
Oct 31
Cash
15680
Note Receivable
14000
Interest
1680
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