Question

alley Spa purchased $10,800 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 10% promissory note for $10,800. If the note is dishonored, but Tubman intends to continue collection efforts, what is the journal entry to record the dishonored note

Answer 1

Answer: PLease find the answer below

Step-by-step explanation:

journal entry to record the dishonored note

Account title Debit Credit

Accounts Receivable—Valley Spa $10,980

Interest Revenue $180

Notes Receivable $10,800.

Interest Revenue = Principal x rate x period

= 10,800 x 10% x 60/360( using 360 days =1 year)

=$180