Answer:
A. Dr Cash 306,988
Dr Finance Charge 20,212
Cr Notes Payable $327,200
B. Dr Cash $364,000
Cr Accounts Receivable $364,000
C. Dr Notes Payable $327,200
Cr Interest Expense $8,180
Cr Cash $319,020
Step-by-step explanation:
A) Preparation of the April 1, 2020, journal entry for Prince Company.
Dr Cash 306,988
(327200-20212)
Dr Finance Charge 20,212
($505,300 x 4% = 20212)
Cr Notes Payable $327,200
B. Preparation of the journal entry for Rasheed’s collection
Dr Cash $364,000
Cr Accounts Receivable $364,000
C. Preparation of the journal entry to record this payment
Dr Notes Payable $327,200
Cr Interest Expense $8,180
(10% x $327,200 x 3/12 = 8180)
Cr Cash $319,020
($327,200-$8,180)