To attract retailers to its shopping center, the Marketplace Mall will lend mone
ID: 2569026 • Letter: T
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 $91,000 to a new tenant on a one-year note with a stated annual interest rate of 9 percent. Interest is to be received by Marketplace Mall on April 30, 2015, and at maturity on October 31, 2015.
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.)
1. Record the receipt of a note on November 1, 2014 for a $91,000 loan to a new tenant.
2. Record the interest accrued on the note as of December 31, 2014.
3. Record the receipt of interest for the period ending April 30, 2015.
4. Record the receipt of the interest on the note’s maturity date.
5. Record the receipt of the payment for the full principal.
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 $91,000 to a new tenant on a one-year note with a stated annual interest rate of 9 percent. Interest is to be received by Marketplace Mall on April 30, 2015, and at maturity on October 31, 2015.
Explanation / Answer
In the books of Marketplace Mall :
Date Account Titles Debit Credit $ $ November 1, 2014 Note Receivable 91,000 Cash 91,000 December 31, 2014 Interest Receivable ( $ 91,000 x 9% x 2/12) 1,365 Interest Revenue 1,365 April 30, 2015 Cash 4,095 Interest Receivable 1,365 Interest Revenue 2,730 October 31, 2015 Cash 4,095 Interest Revenue 4,095 October 31, 2015 Cash 91,000 Note Receivable 91,000Related Questions
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