Question

On June 6, Pilgrims Bank & Trust lont 590,000 to Sue Ann Noel on a 60 day, 6% note. Requirements 1. Journalize for Pilgrims the lending of the money on June 6. Journalize the collection of the principal and interest at maturity. Specify the date. Round to the nearest dollar

Answer 1

Solution 1:

Journal Entries
Date	Particulars	Debit	Credit
6-Jun	Note receivables Dr	$90,000.00
	To Cash		$90,000.00
	(To record money lent to Pilgrims)
5-Aug	Cash Dr	$90,900.00
	To Note receivables		$90,000.00
	To Interest revenue ($90,000*6%*60/360)		$900.00
	(to record collection at maturity)

Note: It is assumed that 360 days in a year.

Solution 2:

Depletion expense for 2018 = $96,000,000 * 5,000,000 / 160,000,000 = $3,000,000

Journal Entries
Date	Particulars	Debit	Credit
31-Dec	Depletion expense Dr	$3,000,000.00
	To Accumulated depletion		$3,000,000.00
	(To record depletion expense)