Question

Jung & Newbicalm Advertising (UNA) recently hired a new creative director, Howard Rachell, for its Madison Avenue office in New York To persuade Howard to move from San Francisco, JNA agreed to advance him $160,000 on April 30, 2018, on a one-year, 10 percent note, with interest payments required on October 31, 2018, and April 30, 2019. JNA issues quarterly financial statements on March 31, June 30, September 30, and December 31 Prepare journal entries to record the note's issuance, interest earned, and interest payments received for each quarter and on each payment date. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to whole dollar amount) View transaction list Journal entry worksheet < 1 3 4 5 6 7 8 Record the receipt of a note on April 30, 2018 for a $160,000 loan to the new creative director Note: Enter debits before credits Date General Journal Debit Credit Apr 30, 2018 Record entry Clear entry View general journal

Answer 1

Journal entries:

Date	Account title and explanation	Debit	Credit
Apr 30,2018	Notes receivable	$160,000
	Cash		$160,000
	[To record receipt of notes]
June 30,2018	Interest receivable	$2,667
	Interest revenue [160,000 x 10% x (2/12)]		$2,667
	[To record accrued interest earned]
Sept. 30,2018	Interest receivable	$4,000
	Interest revenue [160,000 x 10% x (3/12)]		$4,000
	[To record accrued interest earned]
Oct. 31,2018	Cash	$8,000
	Interest receivable (2,667+4,000)		$6,667
	Interest revenue (160,000 x 10% x (1/12)]		$1,333
	[To record collection interest]
Dec. 31,2018	Interest receivable	$2,667
	Interest revenue [160,000 x 10% x (2/12)]		$2,667
	[To record accrued interest earned]
Mar 31,2019	Interest receivable	$4,000
	Interest revenue [160,000 x 10% x (3/12)]		$4,000
	[To record accrued interest earned]
Apr 30,2019	Cash	$8,000
	Interest receivable (2,667+4,000)		$6,667
	Interest revenue (160,000 x 10% x (1/12)]		$1,333
	[To record collection interest]
Apr 30,2019	Cash	$160,000
	Notes receivable		$160,000
	[To record collection of principal]