Accounting for notes receivable, dishonored notes, and accrued interest revenue [20-30 min]
Consider the following transactions for Rural Beginnings.
2011 | |
Dec 6 | Received a $4,000, 90-day, 9% note on account from AM Publishing. |
31 | Made an adjusting entry to accrue interest on the AM Publishing note. |
31 | Made a closing entry for interest revenue. |
2012 | |
Mar 4 | Collected the maturity value of the AM Publishing note. |
Jun 30 | Loaned $15,000 cash to Johnathon’s Publishing, receiving a six-month, 8% note. |
Oct 2 | Received a $2,000, 60-day, 8% note for a sale to Ying Yang Music. Ignore cost of goods sold. |
Dec 1 | Ying Yang Music dishonored its note at maturity; wrote off the note as uncollectible, debiting Allowance for uncollectible accounts. |
30 | Collected the maturity value of the Johnathon’s Publishing note. |
Requirement
1. Journalize all transactions for Rural Beginnings. Round all amounts to the nearest dollar. (For notes stated in days, use a 360-day year.)
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