Record the following transactions in general journal form for Karen Heller Compa

Question

Record the following transactions in general journal form for Karen Heller Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

July 1 Received a $20,000, 8%, 3-month note, dated July 1, from Nancy Freeman in payment of her open account. Oct. 1 Received notification from Nancy Freeman that she was unable to honor her note at this time. It is expected that Freeman will pay at a later date. Nov. 15 Received full payment from Nancy Freeman for her note receivable previously dishonored.

Explanation / Answer

Date Account Titles and Explanation Debit Credit July 1 Notes Receivable 20,000 Accounts Receivable 20,000 Oct 1 Accounts Receivable ( Principal + Interest) 20,400 Notes Receivable 20,000 Interest Revenue ( $ 20,000 *8% *3/12) 400 Nov 15 Cash 20,400 Accounts Receivable 20,400

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