Question

11 Exercise 7-13 Honoring a note LO P4 Following are selected transactions for Vitalo Company pints Skipped Nov. Accepted a $7,000, 180-day, 56 note dated November 1 fron Kelly White in granting 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 Yebruary has 28 days for the current year. Book Complete the table to calculate the interest amounts at December 31st and April 30th and use those calculated values to prepare your journal entries (assume that no reversing entries are recorded) (Do not round intermediate calculations. Use 360 days a year) Hint Print Complete this question by entering your answers in the tabs below. Beferences Interest Amounts General Journal Complete the table to calculate the interest amounts at December 31st and April 30th Total Through Maturity November 1 Through December 31 January 1 Through April 30 Principal Rate(%) Time Total interest General Journal >

Answer 1

Total Through Maturity $7,000 5% November 11 January 1 Through Through April 30 December 31 $7,000 $7,000 5% 120 $58 $117 [($7000 x [($7000 x 5%)/360 x 60] 5%)/360 x 120] Principal Rate (%) Time Total Interest 5% 60 180 $175 [($7000 x 5%)/360 x 180] Credit Date Nov 1 $7,000 Dec 31 $58 $58 Account Title Debit Note Receivable $7,000 Account Receivable (To record notes receivable) Interest Receivable Interest Income (To record accrual of interest income) Cash $7,175 Interest Receivable Interest Income Note Receivable (To record colelction of interest and notes receivable) Apr 30 $58 $117 $7,000