On December 1, Daw Co. accepts a $30,000, 45-day, 7% note from a customer.

Question

Question

On December 1, Daw Co. accepts a $30,000, 45-day, 7% note from a customer.

(1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31.

(2) Prepare the entry required on the note's maturity date assuming it is honored. (Use 360 days a year.)

business accounting

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Answer 1

Answer #1

a) Adjusting entry

Date	account and explanation	Debit	Credit
Dec 31	Interest receivable (300007%30/360)	175
	Interest revenue		175
	(To record accrued interest)

b) Journal entry

Date	account and explanation	Debit	Credit
Jan 15	Cash	30262.50
	Notes receivable		30000
	Interest receivable		175
	Interest revenue		87.50
	(To record collection)

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Answer 2

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On December 1, Daw Co. accepts a $30,000, 45-day, 7% note from a customer.

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On December 1, Daw Co. accepts a $32,000, 45-day, 9% note from a customer.

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On August 2, Jun Co. receives a $7,400, 90-day, 13.5% note from customer Ryan Albany as payment on his $7,400 account receivable

On December 1, Daw Co. accepts a $30,000, 45-day, 7% note from a customer.

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