Question

Unit Exercises 4 Question 1 Multi Media Ltd. completed the following transactions: • September 14, 2016: Provided services to Inga Corporation on account, $3,000, terms 30 days. • November 1, 2016: Accepted a one-year, 12% note from Inga Corporation to settle its account. • December 31, 2016: Accrued interest on the note from Inga Corporation (round to the nearest dollar). • November 1, 2017: Received amount due from Inga Corp on. 1. Record entries for the above transactions. Question 2 1. Compute the unknowns for the following transactions dealing with interest on notes receivable. 365 days per year. Round your answers to the nearest dollar. Maturity Principal Rate $10,000 $25,000 A $50,000 $36,000 Interest 10% 12% 6% B 9% Duration 120 days с 180 days 60 days D Interest Value E $2,515 $2,959 $493 F H 1 J $36,710

Answer 1

Solution 1

Date Particulars Debit Credit Amount (Dr.) Amount (Cr.) 3,000 3,000 Sept 14, 2016 Accounts Receivable- Igna Service Revenue (Service performed on account) Date Nov 1, 2016 Particulars Debit Credit Amount (Dr.) Amount (Cr.) Note Receivable- Igna 3,000 Accounts Receivable- Igna 3,000 (12% Note from Igna Corporation to settle account) Date Particulars Debit Credit Amount (Dr.) Amount (Cr.) 60 Dec 31, 2016 2 Interest Receivable $3,000 0.12 x 12 Interest Revenue (Accrued Interest revenue) 60 Date Particulars Nov 1, 2017 Cash Note Receivable- Igna Interest Receivable 10 Interest Revenue $3,000 0.12 x 12 (Note Collected at Maturity) Debit Credit Amount (Dr.) Amount (Cr.) 3,360 3,000 60 300