The following data relate to notes receivable and interest for CGH Cable Co., a

Question

The following data relate to notes receivable and interest for CGH Cable Co., a cable manufacturer and supplier. (All notes are dated as of the day they are received.) Apr. 10. Received a $135,600, 5%, 60-day note on account. May 15. Received a $252,900, 7%, 120-day note on account. June 9. Received $136,730 on note of April 10. Aug. 22. Received a $110,800, 3%, 45-day note on account. Sept. 12. Received $258,801 on note of May 15. 30. Received a $183,600, 8%, 60-day note on account. Oct. 6. Received $111,216 on note of August 22. 18. Received a 142,200, 5%, 60-day note on account. Nov. 29. Received $186,048 on note of September 30. Dec. 17. Received $143,385 on note of October 18.

Explanation / Answer

JOURNAL ENTRIES FOR CGH CABLE CO.

DATE PARTICULARS DEBIT CREDIT

April 10 5 % Notes receivable A/c Dr. $135,600

to 5 % accounts receivable A/c $ 135,600

( Being principal amont of notes recorded @ 5 % for 60 days )

Interest receivable A/c Dr. $ 1,130

to Interest Income A/c $ 1,130

(Being interest income accrued on $ 135,600 @ 5% for 60 days )

May 15 7% Notes receivable A/c Dr. $ 252,900

to 7 % Accounts receivable A/c $252,900

(Being principal amount of notes recorded @ 7% for 120 days )

Interest receivable A/c Dr. $ 5,901

to Interest income Ac $ 5,901

(Being interest income accrued on $ 252,900 @ 7% for 120 days )

June 9   Cash A/c Dr. $ 136,730

to 5 % notes receivables A/c $135,600

to Interest receivable A/c $ 1,130

(Being 5 % notes receivables honoured )

Aug 22 3 % Notes receivable A/c Dr. $ 110,800

to 3 % accounts receivable A/c $ 110,800

(Being principal amount of notes recorded @ 3%

for 45 days )

Interest receivable A/c Dr. $ 416

to Interest income A/c $ 416

(Being interest income accrued on $110,800

@ 3% for 45 days )

Sep 12 Cash A/c Dr. $ 258,801

To 7% Notes receivables A/c $ 252,900

To Interest receivable A/c $ 5,901

(Being 7 % notes receivable honoured )

Sep 30   8 % Notes receivable A/c Dr. $ 183,600

To 8 % accounts receivable A/c $ 183,600

(Being principal amount of notes recorded

@8 % for 60 days )

Interest receivable A/c Dr. $ 2,448

To Interest income A/c $ 2,448

(Being interest income accrued on $183,600

@8 % for 60 days )

Oct 6 Cash A/c Dr. $ 111,216

To 3 % Notes receivabe A/c $110,800

To Interest receivable A/c $ 416

(Being 3 % Notes receivable honoured )

Oct 18 5 % Notes receivable A/c Dr. $ 142,200

To 5 % Accounts receivable A/c $ 142,200

(Being principal amount of notes recorded

@ 5 % for 60 days )

Interest receivable A/c Dr. $ 1,185

to Interest income A/c $ 1,185

(Being interest income accrued on $142,200 @ 5 %

for 60 days )

Nov 29 Cash A/c Dr. $ 186,048

To 8 % Notes receivable A/c $ 183,600

To Interest receivable A/c $ 2,448

(Being 8 % notes receivable honoured )

Dec 17 Cash A/c Dr. $ 143,385

To 5 % notes receivable A/c $ 142,200

To Interest receivable A/c $ 1,185

(Being 5 % notes receivable honoured )

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