Question

Exercise 8-17 Honouring a note LO4 Prepare journal entries to record these transactions: (Round your answers to 2 decimal places.) Oct 31 Accepted a $19,000, six-month, 6.00 note dated today from Leann Grimes in granting a time extension on her past-due account. Dudu Adjusted the books for the interest due on the Grimes note. Apr 30 Grimes honoured her note when presented for payment. View transaction list View journal entry worksheet Credit Date Oct 31 General Journal Notes receivable-Leann Grimes Accounts receivable-Leann Grimes Debit 19,000.00 19,000.00 Dec 31 No Transaction Recorded Apr 30 19,000.00 Cash Notes receivable Leann Grimes Interest receivable Interest income

Answer 1

No	Date	General Journal	Debit	Credit
1	Oct. 31	Note receivable - Leann Grimes	$19,000
		Accounts receivable - Leann Grimes		$19,000
		( To record note receivable)
2	Dec 31	Interest receivable	$190
		Interest income		$190
		( To record interest revenue)
3	Apr-30	Cash	$19,570
		Note receivable - Leann Grimes		$19,000
		Interest receivable		$190
		Interest income		$380
		( To record note payment)

Interest revenue to be recorded on December 31 = Note receivable x Interest rate x 2/12

= 19,000 x 6% x 2/12

= $190

Interest revenue to be recorded on April 30 = Note receivable x Interest rate x 4/12

= 19,000 x 6% x 4/12

= $380

Kindly give a positive rating if you are satisfied with this solution and please ask if you have any query.

Thanks