Question

At January 1, 2017, Tobita following is a table containing details of the notes receivable and the balance of the interest accrued on each note as of the end of the last fiscal year, December 31, 2016 Interest Accrued $29.17 26.25 70.00 125.42 Note Interest Issue 1 E. Tessier $3,500 2R. Wolde 7,000 3 D. Deng 12,000 Date Nov. 1, 2016 Nov. 30, 2016 Dec. 1, 2016 Term 3 months 5months 4.5% 7.0% 1year Total All notes require that the interest be paid at the maturity of the note. All notes and interest were paid on time. Tobita prepares adjusting journal entries at the end of its fiscal of 2017 Mar. I Oct. 30 Nov. 30 Received a S 14,000, twelve-month, 5.0% note from Lalonde in settlement of an accounts receivable. Interest is due at maturity. Received a s6,000, three-month, 4.5% note from. Han in settlement of an accounts receivable. Interest is due at maturity, Lent B. Morgan $10,000 cash in exchange for a two-year 7.0% note with interest due at maturity,

prepare all journal entries for Tobita Merchants for the all of the above transactions

Answer 1

Date	Account titles	Debit	Credit
1-Feb	cash	3543.75
	note receivable-E Tessier		3500
	interest receivable		29.17
	interest revenue		14.58
1-Mar	Note receivable-t.lalonde	14000
	Account receivable		14000
30-Apr	cash	7131.25
	note receivable-R wolde		7000
	interest receivable		26.25
	interest revenue		105
30-Oct	Note receivable-J.Han	6000
	Account rceivable		6000
30-Nov	note receivable-B.Morgan	10000
	cash		10000
1-Dec	cash	12840
	note receivable-D.Deng		12000
	interest receivable		70
	interest revenue		770

Adjusting entry:

31-Dec	interest receivable	686.67
	interest revenue		686.67

14000 * 5% *10/ 12 = 583.33

6000 * 4.5% * 2/12 = 45

10000 * 7% * 1/12 = 58.33

583.33 + 45 + 58.33 = 686.666