Question

please help for apr 26 and June 5. thank you so much

Journal Entries (Note Received, Discounted, Dishonored, and Collected) Apr. 6 Received a 120-day, 6% note in payment for accounts receivable balance of $3,000. 26 Discounted the note at a rate of 7%. May 3 Received a 30-day, 7% note in payment for accounts receivable balance of $900. June 2 The $900, 30-day, 7% note is dishonored. 5 The dishonored note is paid, plus interest at 7% on the maturity value. Prepare general journal entries for the transactions. Assume 360 days in a year. Page: 1 DATE ACCOUNT TITLE DOC. POST. DEBIT CREDIT NO. REF. 20-- 1 Notes Receivable 3,000 1 Apr. 6 2 Accounts Receivable ✓ 3,000 2 3 N min 4 Apr. 26 Cash 2,970 X 5 Notes Receivable ✓ 3,000 5 6 Interest Revenue х X 6 7 7 8 May 3 Notes Receivable 900 8 9 Accounts Receivable 900 9

Answer 1

Date	Account Title	Debit	Credit
April 26	Cash	$3000.50
	Note Receivable		$3000
	Interest Revenue		$0.50
	(to record received payment of note with interest)

Note:

1) Calculate cash proceeds

cash proceeds = Maturity value - Discount Amount (difference in time period)

= [$3000 + ($3000 * 6% * 120/360)] - [$3060 * 7% * 100/360]

= $3060 - $59.50

= $3000.50

2) Calculate interest revenue

Interest revenue = Cash proceeds - Notes receivable

= $3000.50 - $3000

= $0.50

Date	Account Title	Debit	Credit
June 5	Cash	$910
	Account receivable		$905.25
	Interest revenue		$4.75

Note:

1)Calculate Cash Proceeds

Cash proceed = Maturity Value + Interest Amount

= [$900 + ($900 * 7% * 30/360)] + [$905.25 * 7% * 27/360]

= $905.25 + $4.75

= $910

2) Interest revenue = Cash proceeds - Accounts receivable

= $910 - $905.25

=$4.75