Question

Exercise 9-14 Wildhorse Company had the following select transactions. Apr. 1, 2020 Accepted Goodwin Company's 12-month, 12% note in settlement of a $42,600 account receivable. July 1, 2020 Loaned $44,600 cash to Thomas Slocombe on a 9-month, 10% note. Dec. 31, 2020 Accrued interest on all notes receivable. Apr 1, 2021 Received principal plus interest on the Goodwin note. Apr 1, 2021 Thomas Slocombe dishonored its note; Wildhorse expects it will eventually collect. Prepare journal entries to record the transactions. Wildhorse prepares adjusting entries once a year on December 31. (Credit a the order presented in the problem.) Debit Credit Date 4/1/20 Account Titles and Explanation Y Notes Receivable 42600 Accounts Receivable 42600 7/1/20 Y Notes Receivable 44600 Cash 44600 12/31/20 Interest Recelvable Interest Revenue (To record interest at 12%) 12/31/20 (To record interest at 10%) 4/1 20

Answer 1

Answer

--Journal entries

Date	Accounts title	Debit	Credit	Workings
01-Apr-20	Notes receivables	$42,600
	Accounts receivables		$42,600
01-Jul-20	Notes receivables	$44,600
	Cash		$44,600
31-Dec-20	Interest receivables	$3,834		[$ 42600 x 12% x 9 months/12]
	Interest revenue		$3,834	[$ 42600 x 12% x 9 months/12]
31-Dec-20	Interest receivables	$2,230		[$ 44600 x 10% x 6/12]
	Interest revenue		$2,230	[$ 44600 x 10% x 6/12]
01-Apr-21	Cash	$47,712
	Interest receivable		$3,834	[$ 42600 x 12% x 9 months/12]
	Interest revenue		$1,278	[$ 42600 x 12% x 3 months/12]
	Notes receivables		$42,600
01-Apr-21	Accounts receivables	$47,945
	Interest receivable		$2,230	[$ 44600 x 10% x 6/12]
	Interest revenue		$1,115	[$ 44600 x 10% x 3/12]
	Notes receivables		$44,600