Question

0 More Info 2018 Sep. 1 Loaned $18,000 cash to Bob Jewitt on a one-year, 8% note Nov. 8 Sold goods to Fairway Pro, receiving a 90-day, 6% note for $16,000. Ignore Cost of Goods Sold. 30 Made a single entry to accrue interest revenue on both notes ? Collected the maturity value of the Fairway Pro note. 2019 Sep. 1 Collected the maturity value of the Jewitt note Print Done

Answer 1

Date	Particulars	Debit ($)	Credit ($)
Sep 1 2018	Notes receivable – Bob Jewitt	18,000
	Cash		18,000
	(To record cash loan against notes receivable)
Nov 6,2018	Notes receivable – Fairway Pro	16,000
	Sales revenue		16,000
	(To record goods sold against notes receivable)
Nov 30,2018	Interest receivable	424
	Interest revenue		424
	(To record interest revenue)
Feb 7,2019	Cash	16,240
	Interest receivable		64
	Notes receivable – fairway pro		16,000
	Interest revenue ( 16,000 * 6% *66/360)		176
	(To record notes receivable collected)
Sep 1,2019	Cash	19,440
	Interest receivable		360
	Notes receivable – Bob Jewitt		18,000
	Interest revenue ( 18,000 * 8% *270/360)		1080
	(To record notes receivable collected)

Interest on:

8% notes receivable = 18000 * 8% * 90/360 = 360

6% notes receivable = 16,000 * 6% * 24/360 = 64

Total interest = 424

Note that Notes receivable – fairway pro matures on 90 days after Nov 6. It would mature on Feb 7,2019 henceforth and entry shall be made thereon.

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