Question

Entries for receipt and dishonor of notes receivable. Journalize the following transactions in the accounts of Missouri Gaming Co., which operates a riverboat casino. Assume 360 days in a year. If an amount is a debit or credit, please specify:

1. On March 1, 2024, Missouri Gaming Co. received a 90-day, 8% note for $20,000 from a customer.
2. On June 1, 2024, the note was dishonored by the customer, and Missouri Gaming Co. received $20,000 plus interest.

Answer 1

To journalize the entries for receipt and dishonor of notes receivable, debit and credit transactions need to be recorded in the accounts of Missouri Gaming Co.

Step-by-step explanation:

To journalize the entries for receipt and dishonor of notes receivable in the accounts of Missouri Gaming Co., we need to understand the concepts of notes receivable, dishonor of a note, and journal entries.

1. On March 1, 2024, Missouri Gaming Co. received a 90-day, 8% note for $20,000 from a customer.

To record this transaction:
Debit: Notes Receivable - $20,000
Credit: Accounts Receivable - $20,000

2. On June 1, 2024, the note was dishonored by the customer, and Missouri Gaming Co. received $20,000 plus interest.

To record this transaction:
Debit: Accounts Receivable - $20,000
Debit: Interest Receivable - Amount of interest accrued
Credit: Notes Receivable - $20,000
Credit: Interest Income - Amount of interest accrued