Question

Coronado Family Importers sold goods to Tung Decorators for $40,200 on November 1, 2017, accepting Tung’s $40,200, 6-month, 5% note. Prepare Coronado’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest

Answer 1

Solution

Date	General Journal	Debit	Credit
Nov-01	Notes receivable	$   40,200.00
	Sales revenue		$   40,200.00
	(To record sales)
Dec-31	Interest receivable	$         335.00
	Interest revenue		$         335.00
	(To record interest revenue for 2 months accrued)
May-01	Cash	$   41,540.00
	Notes receivable		$   40,200.00
	Interest revenue		$      1,005.00
	Interest receivable		$         335.00

ON dec 31 2 months interest will be accrued............(40200 x 5% x 2/12)