To attract retailers to its shopping center, the Marketplace Mall will lend mone

Question

To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants under formal contracts, provided that they use it to renovate their store space. On November 1, 2014, the company loaned $96,000 to a new tenant on a one-year note with a stated annual interest rate of 10 percent. Interest is to be received by Marketplace Mall on April 30, 2015, and at maturity on October 31, 2015 Required Prepare journal entries that Marketplace Mall would record related to this note on the following dates (a) November 1, 2014; (b) December 31, 2014 (Marketplace Mall's fiscal year-end); (c) April 30, 2015 and (d) October 31, 2015. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list X: 1 Record the receipt of a note on November 1, 2014 for a / 2 Record the interest accrued on the note as of December 3 Record the receipt of interest for the period ending April 96,000 loan to a new tenant. 31, 2014 30, 2015 4 Record the receipt of the interest on the note's maturity 5 Record the receipt of the payment for the full principal Credit date 96,000 Notejournal entry has been entered Record entry Clear entry View general journal

Explanation / Answer

Solution: Following is the required journal entry:

Date Particulars Debit($) Credit($) 11/01/2014 Notes Receivable 96,000 Cash 96,000 12/31/2014 Interest Receivable 1,600 Interest Revenue(96000*10%*2/12) 1,600 04/30/2015 Cash (96000*10%*6/12) 4,800 Interest Receivable 1,600 Interest Revenue 3,200 10/31/2015 Cash (96000*10%*6/12) 4,800 Interest Revenue 4,800 Cash 96,000 Notes Receivable 96,000

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