Question

These transactions took place for Vaughn Manufacturing 2016 May 1 Received a 100, 12-month, note in exchange for an outstanding account receivable from Stone Dec. Acorved interest revenue on the Stoney note 2017 May 1 Received prallus interest on the Stoney note interest has been credince December 11, 2016) Record the transactions in the general oumal The company does not make tries to score interesteptat December 31 Credit accountries are automatically indented when amount entered. Do not indent manually. Record journal entries in the order presented in the problem Date Account Titles and Explanation Credit

Answer 1

Date May 1, credit Debit $3,300 2016 I General Journal Notes Receivable Accounts Receivable (To record notes receivable) $ 3,300 Dec 31, 2016 & 110 $ 110 Interest Receivable Interest Revenue I to record interest revenue) $3,465 May 1, 2017 Cash Notes Receivable Interest Receivable $ 3,300 $ 55 Interest Revenue (to record prunupal and interestin Meceived

Calculation : Dec 31, 2016 Interest revenue - - Principal X $3,300 X Rate x 5% x Time 8 months 12 = $ 110 May 1, 2017 Interest revenue = - = Principal X Rate & Time $3,300 x 5% x y months $ 55 Cash = Notes Receivable & Interest Receivablet Interest Revenue $ 110 + $55 - - $ 3,300 + $ 3, 465