These transactions took place for Bonita Industries 2016 May 1 Received a $6,800

Question

These transactions took place for Bonita Industries 2016 May 1 Received a $6,800, 12-month, 6% note in exchange for an outstanding account receivable from R. Stoney. Dec. 31 Accrued interest revenue on the R. Stoney note. 2017 May 1 Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2016.) Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Debit Credit

Explanation / Answer

1) Journal entry :

Date accounts & explanation debit credit 2016 may 1 Notes receivable a/c 6800 Account receivable a/c 6800 2016 dec 31 Interest receivable a/c 272 Interest revenue a/c (6800*6%*8/12) 272 2017 may 1 Cash a/c 7208 Notes receivable a/c 6800 Interest receivable a/c 272 Interest revenue a/c (6800*6%*4/12) 136

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