Details of Notes Receivable and Related Entries Gen-X Ads Co. produces advertisi

Question

Details of Notes Receivable and Related Entries

Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes:

Required:

Assume 360 days in a year.

1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number.

2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank or enter "0".

3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31.

4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank or enter "0".

Check My Work1 more C

Date Face Amount Interest Rate Term 1. Apr. 10 $54,000 4 % 60 days 2. June 24 18,000 6 30 days 3. July 1 27,000 6 120 days 4. Oct. 31 27,000 5 60 days 5. Nov. 15 90,000 6 60 days 6. Dec. 27 108,000 4 30 days

Explanation / Answer

1.

2. JOURNAL ENTRY

DRAWEE A/C DR.

   TO BILLS RECEIVABLE A/C

( BILL DIHONOURED)

3. JOURNAL ENTRY ON 31 DECEMBER;

INTEREST A/C                                     DR.

          TO ACCURED INTEREST A/C

( INTEREST HAS BEEN ACCURED)

690

INTEREST A/C                                     DR.

          TO ACCURED INTEREST A/C

( INTEREST HAS BEEN ACCURED)

48

4. JOURNAL ENTRY

14 JAN. BANK A/C DR.

                         TO INTEREST A/C

( INTEREST HAS BEEN RECEIVED)

900

900

                         TO INTEREST A/C

( INTEREST HAS BEEN RECEIVED)

360

S.NO. INTEREST AMOUNT AT MATURITY DATE ($) DUE DATE 1. 360 9 JUNE 2. 90 24 JULY 3. 540 29 OCTOBER 4. 225 30 DECEMBER 5. 900 14 JANUARY 6. 360 26 JANUARY

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