Question

Following are transactions for Vitalo Company. Nov. 1 Accepted a $16,000, 180-day, 6% 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 30" and use those calculated values to prepare your journal entries. (Do not round intermediate calculations. Use 360 days a year.) Answer is not complete. Complete this question by entering your answers in the tabs below. Interest Amounts General Journal Complete the table to calculate the interest amounts at December 31st and April 30th. November January 1 Through Total Through Maturity Through December 31 $ $ Principal Rate (%) Time Total interest 16,000 $ 6% 180/360 281 $ 16,000 6% 60/360 60 April 30 16,000 6% 120/360 30 $ $

Answer 1

Answer

• Requirements

	Total through maturity	Nov 1 through Dec 31	Jan 1 through April 30
Principal	$16,000	$16,000	$16,000
Rate %	6%	6%	6%
Time	180/360	60/360	120/360
Total Interest	$480	$160	$320
Total Interest	=16000*6%*180/360	=16000*6%*60/360	=16000*6%*120/360

Date	Accounts title	Debit	Credit
Nov-01	Notes receivables	$16,000
	Accounts receivables		$16,000
	(to record acceptance of notes)
Dec-31	Interest receivables	$160
	Interest revenue		$160
	(to record 60 days interest accrued)
Apr-30	Cash	$16,480
	Interest receivables		$160
	Interest revenue		$320
	Notes receivables		$16,000
	(to record receipt of payment)