Question

Vandiver Company had the following select transactions. Apr. 1, 2017 Accepted Goodwin Company's 12-month, 12% note in settlement of a $93,000 account receivable. July 1, 2017 Loaned $95,000 cash to Thomas Slocombe on a 9-month, 10% note Dec. 31, 2017 Accrued interest on all notes receivable. Apr. 1, 2018 Received principal plus interest on the Goodwin note Apr. 1, 2018 Thomas Slocombe dishonored its note; Vandiver expects it will eventually collect

Answer 1

01-04-17	Notes Receivable	93000
	Accounts receivable		93000
01-07-17	Notes Receivable	95000
	To Cash		95000
31-12-17	Interest Receivable	13120		[93000*12%*9/12]+[95000*10%*6/12]
	Interest Revenue		13120
01-04-18	Cash	104160
	Notes receivable		93000
	Interest revenue (remaining 3 mths' interest)		2790	[93000*12%*3/12]
	Interest Receivable		8370
01-04-18	Accounts receivable	102125
	Notes receivable		95000
	Interest revenue (remaining 3 mths' interest)		2375	[95000*10%*3/12]
	Interest Receivable		4750