Notes receivable—interest accrual and collection On April 1, 2010, Tabor Co. received a $6,000 note from a customer in settlement of a $6,000 account receivable from that customer. The note bore interest at the rate of 15% per annum, and the note plus interest was payable March 31, 2011.
Required:
Use the horizontal model to show the effects of each of these transactions and adjustments:
a. Receipt of the note on April 1, 2010.
b. The accrual of interest at December 31, 2010.
c. The collection of the note and interest on March 31, 2011.
(Note: As an alternative to using the horizontal model, write the journal entries to show each of these transactions and adjustments.)
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