Question

1. Journalize the transaction on 1. 2. Journalize the adjusting entry needed on 31 to accrue interest revenue. Round to the nearest dollar. 3. Journalize the collection of the principal and interest at maturity. Specify the date. Round to the nearest dollar.

Answer 1

Answer and Explanation:

The journal entries are shown below;

1.

Note Receivable-J. Brown $36500

To Accounts Receivable-J. Brown $36,500

(Being Accepted Note Receivable is recorded)

2. Interest Receivable $90 ($36,500 × 3% × 30 ÷ 365)

To Interest Revenue $90

(Being Accrued interest earned is recorded)

3. Cash 36860

To Interest Receivable $90

To Interest Revenue $270 ($36,500 × 3% × 90 ÷ 365)

To Note Receivable-J. Brown $36,500

(Being Collected note receivable plus interest is recorded)