Question

Exercise 8-14

Vandiver Company had the following select transactions.

Apr. 1, 2020 Accepted Goodwin Company's 12 -month, 6 % note in settlement of a $ 30,000 account receivable. 

July 1,2020 Loaned $ 25,000 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.

Apt 1,2021 Thomas Slocombe dishonored its note; Vandiver expects it will eventually collect.

Prepare journal entries to record the transactions. Vandiver prepares adjusting entries once a year on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Date	Title	Debit	Credit
Apr 1, 2020	Note receivable	$ 30000
	Accounts receivable		$ 30000
	(To record receipt of note in exchange of accounts receivable)
July 1, 2020	Note receivable	$ 25000
	Cash		$ 25000
	(To record lending of money to Thomas Slocombo)
Dec 31, 2017	Interest receivable (($30000*6%*9/12)+($25000*10%*6/12))	$    2600
	Interest revenue		$    2600
	(To record interest accrued for the year)
Apr 1, 2020	Cash	$ 31800
	Note receivable		$ 30000
	Interest revenue ($30000*6%*3/12)		$    450
	Interest receivable  ($30000*6%*9/12)		$    1350
	(To record receipt of note with interest)
Apr 1, 2020	Accounts receivable	$ 27500
	Note receivable		$ 25000
	Interest revenue ($25000*10%*3/12)		$    625
	Interest receivable  ($25000*10%*9/12)		$    1875