Question

Crane Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31.

Nov. 1 Loaned $66,600 cash to C. Bohr on a 12-month, 6% note.
Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $7,200, 90-day, 6% note.
Dec. 16 Received a $9,600, 180-day, 8% note to settle an open account from A. Murdock.
Dec. 31 Accrued interest revenue on all notes receivable.

Required:
Journalize the transactions for Crane Company

Answer 1

Journalize the transactions for Crane Company including loaning cash, selling goods, and accruing interest revenue.

Step-by-step explanation:

Journalizing the transactions for Crane Company:

Nov. 1: Loaned $66,600 cash to C. Bohr on a 12-month, 6% note.
- Debit Notes Receivable: $66,600
- Credit Cash: $66,600

Dec. 11: Sold goods to K. R. Pine, Inc., receiving a $7,200, 90-day, 6% note.
- Debit Notes Receivable: $7,200
- Credit Sales: $7,200

Dec. 16: Received a $9,600, 180-day, 8% note to settle an open account from A. Murdock.
- Debit Notes Receivable: $9,600
- Credit Accounts Receivable: $9,600

Dec. 31: Accrued interest revenue on all notes receivable.
- Debit Interest Receivable: (Calculations required)
- Credit Interest Revenue: (Calculations required)

Note: The calculations for interest revenue on December 31 would depend on the number of days that each note has been outstanding.