Question

These transactions took place for Bramble Corp. 2021 May 1 Received a $7,000, 12-month, 6% note in exchange for an outstanding account receivable from R. Stoney. Dec. 31 Accrued interest revenue on the R. Stoney note. 2022 May 1 Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2021.) Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Answer 1

Journal

Date	Account Title and Explanation	Debit	Credit
May 1, 2021	Note receivable	7,000
	Accounts receivable - R. Stoney		7,000
Dec 31, 2021	Interest receivable	280
	Interest revenue		280
May 1, 2022	Cash	7,420
	Note receivable		7,000
	Interest receivable		280
	Interest revenue		140

Interest accrued on Dec 31, 2021 = 7,000 x 6% x 8/12

= $280

Interest revenue to be recorded on May 1, 2022 = 7,000 x 6% x 4/12

= $140

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