Entries for Notes Receivable, Including Year-End Entries The following selected
ID: 2554601 • Letter: E
Question
Entries for Notes Receivable, Including Year-End Entries
The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:
Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.
20Y3 Nov. 21. Received from McKenna Outer Wear Co., on account, a $66,000, 60-day, 10% note dated November 21 in settlement of a past due account. Dec. 31. Recorded an adjusting entry for accrued interest on the note of November 21. 20Y4 Jan. 20. Received payment of note and interest from McKenna Outer Wear Co.Explanation / Answer
Journal entry
Date accounts & explanation Debit credit 20Y3, Nov. 21 Notes receivable 66000 Account receivable 66000 (To record notes receivable) Dec 31 Interest receivable (66000*10%*40/360) 733 Interest revenue 733 (To record accured interest) 20Y4, Jan. 20 Cash 67100 Notes receivable 66000 Interest receivable 733 Interest revenue 367 (To record amount received)Related Questions
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