Sunland Family Importers sold goods to Tung Decorators for $41,400 on November 1

Question

Sunland Family Importers sold goods to Tung Decorators for $41,400 on November 1, 2017, accepting Tung’s $41,400, 6-month, 5% note.

Prepare Sunland’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date

Account Titles and Explanation

Debit

Credit

Date

Account Titles and Explanation

Debit

Credit

11/1/1712/31/175/1/18

11/1/1712/31/175/1/18

11/1/1712/31/175/1/18

Explanation / Answer

Journal entry :

Date Account Titles and Explanation Debit credit 11/1/17 Notes receivable 41400     Sales revenue 41400 12/31/17 Interest receivable (41400*5%*2/12) 345     Interest revenue 345 5/1/18 Cash 42435     Notes receivable 41400     Interest receivable 345     Interest revenue (41400*5%*4/12) 690

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