Question

Windsor Company had the following select transactions. Apr. 1, 2020 July 1, 2020 Dec. 31, 2020 1, 2021 Apr. 1, 2021 Accepted Goodwin Company's 12-month, 10% note in settlement of a $65,000 account receivable. Loaned $67,000 cash to Thomas Slocombe on a 9-month, 8% note. Accrued interest on all notes receivable. Received principal plus interest on the Goodwin note. Thomas Slocombe dishonored its note; Windsor expects it will eventually collect. Apr. Prepare journal entries to record the transactions. Windsor 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.) Date Account Titles and Explanation Debit Notes Receivable Accounts Receivable Notes Receivable cash in cas (To record interest at 10%) Interest Receivable Interest Revenue (To record interest at 8%) Cash Notes Receivable Interest Revenue Interest Receivable Screenshot (To record principal plus interest on the Goodwin note

Answer 1

Journal

Date	Account Title and Explanation	Debit	Credit
April 1, 2020	Note receivable	65,000
	Accounts receivable		65,000
July 1, 2020	Note receivable	67,000
	Cash		67,000
Dec 31, 2020	Interest receivable	4,875
	Interest revenue		4,875
	(To record interest at 10%)
Dec 31, 2020	Interest receivable	2,680
	Interest revenue		2,680
	(To record interest at 8%)
April 1, 2021	cash	71,500
	Note receivable		65,000
	Interest revenue		1,625
	Interest receivable		4,875
	(To record principal and interest on the goodwin note)
Apr 1, 2021	Accounts receivable	71,020
	Note receivable		67,000
	Interest revenue		1,340
	Interest receivable		2,680
	(To record note dishonoured)

Interest receivable on Goodwin company at Dec 31, 2020 = Note receivable x Interest rate x 9/12

= 65,000 x 10% x 9/12

= $4,875

Interest receivable on Thomas slocombe note at Dec 31, 2020 = Note receivable x Interest rate x 6/12

= 67,000 x 8% x 6/12

= $2,680

Interest revenue on Goodwin company note at Apr 1, 2021 = Note receivable x Interest rate x 3/12

= 65,000 x 10 x 3/12

= $1,625

Interest revenue on Thomas slocombe note at Apr 1, 2021 = Note receivable x Interest rate x 3/12

= 67,000 x 8% x 3/12

= $1,340