Question

 Following are transactions for Vitalo Company.

 Nov. 1 Accepted a $6,000, 180-day, 88 note from Kelly White in granting a time extension on her past-due account receivable.

 Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note.

 Apr. 30 White honored her note when presented for payment.

 Complete the table to calculate the interest amounts at December 31st and April 3oth and use those calculated values to prepare your journal entries. (Do not round intermediate calculations. Use 360 days a year.)

Answer 1

Answer

• Requirement 1

	Total through maturity	Nov 1 through Dec 31	Jan 1 through April 30
Principal	$6,000	$6,000	$6,000
Rate %	8%	8%	8%
Time	180/360	60/360	120/360
Total Interest	$240	$80	$160

• Requirement 2

Date	Accounts title	Debit	Credit
Nov-01	Notes receivables	$6,000
	Accounts receivables		$6,000
	(to record acceptance of notes)
Dec-31	Interest receivables	$80
	Interest revenue		$80
	(to record 60 days interest accrued)
Apr-30	Cash	$6,240
	Interest receivables		$80
	Interest revenue		$160
	Notes receivables		$6,000
	(to record receipt of payment)