Question

2018

Feb. 1 Loaned $12,000 cash to Candace Smith on a one-year, 6% note.
Apr. 6 Sold goods to Park Pro, receiving a 90-day, 12% note for $6,000. Ignore Cost of Goods Sold.
Apr. 30 Made a single entry to accrue interest revenue on both notes.

Required:
Journalize the entires.

Answer 1

Journal Entries

2018

Feb. 1 Debit 6% Note Receivable (Candace Smith) $12,000

Credit Cash $12,000

To record receipt of a one-year, 6% note.

Apr. 6 Debit 12% Note Receivable (Park Pro) $6,000

Credit Sales Revenue $6,000

To record receiving a 90-day, 12% note.

Apr. 30 Debit Interest Receivable $230

Credit Interest Revenue $230

To accrue interest revenue for both notes.

Step-by-step explanation:

a) Data and Analysis:

2018

Feb. 1 6% Note Receivable (Candace Smith) $12,000 Cash $12,000

a one-year, 6% note.

Apr. 6 12% Note Receivable (Park Pro) $6,000 Sales Revenue $6,000, receiving a 90-day, 12% note

Apr. 30 Interest Receivable $230 Interest Revenue $230

($12,000 * 6% * 3/12) + ($6,000 * 12% * 25/360)

= $180 + $50

= $230