Question

Exercise 8-12 a-b Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2020. The company does not make entries to accrue interest except at December 31. Nov. 1 Loaned $30,000 cash to Manny Lopez on a 12 month, 10% note. Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $6,750, 90-day, 8% note. 16 Received a $4,000, 180 day, 9% note in exchange for Joe Fernetti’s outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable. Record the collection of the Lopez note at its maturity in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

I am having trouble with the record the collection of the Lopez note at its maturity in 2021

Answer 1

Date	Account title	Debit	credit
31 Oct 2021	cash	33000
	Interest receivable		500
	Interest revenue		2500
	Note receivable		30000

**Interest accrued on Lopez note for a 12 month period = 30000*10%= 3000. out of which 2month interest was accrued in 2020 [1Nov-31Dec] amounting to 30000*10%*2/12 = 500 so rest is accrue in 2021 which is equals to 3000-500 = 2500