Question

C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2018, to advance Jeff $55,000 on a one-year, 7 percent note, with interest to be paid at maturity on February 28, 2019. CSM prepares financial statements on June 30 and December 31. Prepare the journal entry CSM will make when the note is established, accrue interest on June 30 and December 31, and the interest and principal payments on February 28, 2019. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to whole dollar amount.) View transaction list Journal entry worksheet < 1 2 3 4 5 Record the receipt of a note on February 28, 2018 for a $55,000 loan to an employee. Note: Enter debits before credits. General Journal Debit Credit Date Feb 28, 2018 Record entry Clear entry View general journal

Answer 1

Debit $ Credit $ Journal Entries :- Date Accounts Title & Explanation 28-Feb-18 Notes Receivable To Cash (Entry for issue of note for a loan to employee) 55,000.00 55,000.00 Accrued interest revenue for 4 months is = (55000*7%*(4/12)) = $ 1,283.33/. 1,283.33 30-Jun-18 Interest Receivable To Interest Revenue (Entry for accrued interest for 4 months) 1,283.33 Accrued interest revenue for 6 months is = (55000*7%*(6/12)) = $ 1,925). 31-Dec-18 Interest Receivable 1,925.00 To Interest Revenue (Entry for accrued interest for 6 months from July to December) 1,925.00 Accrued interest revenue for 2 months is = (55000*7%*(2/12)) = $ 641.677. 3,850.00 641.67 28-Feb-19 Cash To Interest revenue To Interest receivable (Entry for Interest receipt) 3,208.33 28-Feb-19 Cash 55,000.00 55,000.00 To Notes Receivable (Entry for receipt of note payment on maturity)