Question

Shown below are several accounts from a company's ledger with each account preceded by an identification number, and a transaction completed by this company. Indicate the number corresponding to the account debited and the number corresponding to the account credited when journalizing this transaction.

1. Accounts payable
2. Accounts receivable
3. Allowance for doubtful accounts
4. Bad debt expense
5. Cash
6. Factoring Fee Expense
7. Interest earned
8. Interest expense
9. Interest receivable
10. Notes payable
11. Notes receivable
12. Sales

Received payment for a note at maturity in the same year the note was received. The number corresponding to the account debited is _______________. The number corresponding to one of the accounts credited is _______________ and the number corresponding to the other account credited is ________________.

Answer 1

In the transaction of receiving payment for a note at maturity, account number 5 (Cash) is debited, and account numbers 11 (Notes Receivable) and 7 or 9 (Interest Earned or Interest Receivable) are credited, depending on whether interest was previously recorded or not.

Step-by-step explanation:

When a company receives payment for a note at maturity within the same year the note was received, the necessary journal entry includes debiting and crediting specific accounts.

The number corresponding to the account debited is the Cash account, as the company is receiving cash. In this case, that number is 5.

The number corresponding to one of the accounts credited is Notes Receivable because the note has been paid off. This corresponds to 11. If there was interest earned on the note, then Interest Earned would also be credited; this number is 7.

However, if interest was already recorded in a previous period, the Interest Receivable account (number 9) would instead be credited.