Homework Answers
a.
| Date | Account Titles | Debit | Credit | |
| Sep-30 | Notes Receivable | $ 115,000 | ||
| Accounts Receivable | $ 115,000 | |||
| Dec-31 | Interest Receivable | $ 2,875 | =115000*10%*3/12 | |
| Interest Income | $ 2,875 | |||
| Sep-30 | Cash | $ 126,500 | ||
| Interest Receivable | $ 2,875 | |||
| Interest Income | $ 8,625 | =115000*10%*9/12 | ||
| Notes Receivable | $ 115,000 |
b.
| Date | Account Titles | Debit | Credit | |
| Sep-30 | Notes Receivable | $ 115,000 | ||
| Accounts Receivable | $ 115,000 | |||
| Dec-31 | Notes Receivable | $ 2,875 | =115000*10%*3/12 | |
| Interest Income | $ 2,875 | |||
| Sep-30 | Notes Receivable | $ 8,625 | ||
| Interest Income | $ 8,625 | =115000*10%*9/12 | ||
| Sep-30 | Cash | $ 126,500 | ||
| Notes Receivable | $ 126,500 |
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note for the open account. The following two options were presented
to Ayayai by Bramble Corp.:
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due on September 30, 2020. Bramble agreed to substitute a one-year
note for the open account. The following two options were presented
to Ayayai by Bramble Corp.:
Option 1:
A one-year note for $96,000 due September 30, 2021. Interest at
a rate of 8% would be payable at maturity.
Option 2:
A one-year non–interest-bearing note for $103,680. The...
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