ons The following selected transactions were completed by Interlocking Devices C

Question

ons The following selected transactions were completed by Interlocking Devices Co., a supplier of zippers for clothing: 2017 Received from Unitarian Clothing & Bags Co., on account, a $34,500, 60-day, 12% note dated December 7. Recorded an adjusting entry for accrued interest on the note of December 7, Recorded the closing entry for interest revenue. Dec. 7 31 31 2018 Feb. S Received payment of note and interest from Unitarian Clothing & Bags Co. Journalize the entries to record the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year o Oo

Explanation / Answer

JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 2017 Dec. 7 Note receivable 34500 34500 Accounts receivable 34500 -34500 (To record note receivable on account) Dec. 31 Interest receivable ($34500 x 12% x 24/360) 276 276 Interest revenue 276 276 (To record interest accrued on note receivable) Dec. 31 Interest revenue 276 -276 Income Summary 276 276 (To close interest revenue account) 2018 Feb. 5 Cash 35190 35190 Note receivable 34500 -34500 Interest receivable 276 -276 Interest revenue ($34500 x 12% x 36/360) 414 414 (To record collection against note)

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