Question

To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants under formal contracts, provided that they use it to renovate their store space. On November 1, 2017, the company loaned $109,000 to a new tenant on a one-year note with a stated annual interest rate of 9 percent. Interest is to be received by Marketplace Mall on April 30, 2018, and at maturity on October 31, 2018.

Required:

Prepare journal entries that Marketplace Mall would record related to this note on the following dates: (a) November 1, 2017; (b) December 31, 2017 (Marketplace Mall’s fiscal year-end); (c) April 30, 2018; and (d) October 31, 2018. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Date	General Journal	Debit	Credit
Nov. 1,2017	Notes receivable	109000
	Cash		109000
Dec. 31,2017	Interest receivable	1635		=109000*9%*2/12
	Interest revenue		1635
Apr. 30,2018	Cash	4905
	Interest receivable		1635
	Interest revenue		3270	=109000*9%*4/12
Oct. 31,2018	Cash	4905		=109000*9%*6/12
	Interest revenue		4905
	Cash	109000
	Notes receivable		109000