Moses Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. Nov. 1 Loaned $60,000 cash to C. Bohr on a 12-month, 7% note. Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $3,600, 90-day, 8% note. 16 Received a $12,000, 180-day, 9% note to settle an open account from A. Murdock. 31 Accrued interest revenue on all notes receivable. - Journalize the transactions for Moses Supply Co. (Omit cost of goods sold entries.)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Moses Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31.
| Nov. | 1 | Loaned $60,000 cash to C. Bohr on a 12-month, 7% note. | |
| Dec. | 11 | Sold goods to K. R. Pine, Inc., receiving a $3,600, 90-day, 8% note. | |
| 16 | Received a $12,000, 180-day, 9% note to settle an open account from A. Murdock. | ||
| 31 | Accrued interest revenue on all notes receivable. |
- Journalize the transactions for Moses Supply Co. (Omit cost of goods sold entries.)
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