Exercise 8-10 Date Account Titles and Explanation Debit Credit SHOW LIST OF ACCO

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Exercise 8-10

Date

Account Titles and Explanation

Debit

Credit

SHOW LIST OF ACCOUNTS

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Date

Account Titles and Explanation

Debit

Credit

Exercise 8-10

Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2017. The company does not make entries to accrue interest except at December 31.
Nov. 1 Loaned $21,500 cash to Manny Lopez on a 12-month, 12% note. Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $59,400, 90-day, 10% note. 16 Received a $62,400, 180 day, 12% note in exchange for Joe Fernetti’s outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable.

Explanation / Answer

Journal entry :

Journal entry

Date account titles and explanation debit credit Nov 1 Notes receivable-Manny Lopez 21500 Cash 21500 (To record loan given) Dec 11 Notes receivable-Ralph Kremer, Inc. 59400 Sales revenue 59400 (To record sales) Dec 16 Notes receivable- Joe Fernetti’s 62400 Account receivable- Joe Fernetti’s 62400 (To record notes receivable in exchange of account receivable) Dec 31 Interest receivable 1072 Interest revenue 1072 (To record accured interest)

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