Cornerstone Exercise 5-35 (Algorithmic) Notes Receivable Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 12% interest on February 1, 2019. Required: 1. Prepare the journal entry to record the sale on February 1, 2019. Notes Receivable 135,000 Sales Revenue Record sale Feedback Check My Work 135,000 1. Revenue can be recognized when earned, even if the customer has not paid, as long as collectability is reasonably assured. 2. Determine how much interest Link will receive if the note is repaid on December 1, 2019. Round your answer to the nearest whole dollar. 11,250 X Feedback Check My Work 2. When calculating interest, consider the principal, the annual interest rate and the duration of the note. 3. Prepare Link's journal entry to record the cash received to pay off the note and interest on December 1, 2019. If an amount box does not require an entry, leave it blank. 146,250 X Cash Interest Income Notes Receivable Record collection of note 11,250 X 135,000
Cornerstone Exercise 5-35 (Algorithmic) Notes Receivable Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 12% interest on February 1, 2019. Required: 1. Prepare the journal entry to record the sale on February 1, 2019. Notes Receivable 135,000 Sales Revenue Record sale Feedback Check My Work 135,000 1. Revenue can be recognized when earned, even if the customer has not paid, as long as collectability is reasonably assured. 2. Determine how much interest Link will receive if the note is repaid on December 1, 2019. Round your answer to the nearest whole dollar. 11,250 X Feedback Check My Work 2. When calculating interest, consider the principal, the annual interest rate and the duration of the note. 3. Prepare Link's journal entry to record the cash received to pay off the note and interest on December 1, 2019. If an amount box does not require an entry, leave it blank. 146,250 X Cash Interest Income Notes Receivable Record collection of note 11,250 X 135,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 34CE: Notes Receivable Metzler Communications designs and programs a website for a local business. Metzler...
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Transcribed Image Text:Cornerstone Exercise 5-35 (Algorithmic)
Notes Receivable
Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 12% interest on February 1, 2019.
Required:
1. Prepare the journal entry to record the sale on February 1, 2019.
Notes Receivable
135,000
Sales Revenue
Record sale
Feedback
Check My Work
135,000
1. Revenue can be recognized when earned, even if the customer has not paid, as long as collectability is reasonably assured.
2. Determine how much interest Link will receive if the note is repaid on December 1, 2019. Round your answer to the nearest whole dollar.
11,250 X
Feedback
Check My Work
2. When calculating interest, consider the principal, the annual interest rate and the duration of the note.
3. Prepare Link's journal entry to record the cash received to pay off the note and interest on December 1, 2019. If an amount box does not require an entry, leave it blank.
146,250 X
Cash
Interest Income
Notes Receivable
Record collection of note
11,250 X
135,000
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