On December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a $27,000, 60-day note. Required: Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer’s repayment on February 9, 2020, assuming:1.Interest of 9% was assessed in addition to the face value of the note.2.The note was issued as a $27,000 non-interest-bearing note with a present value of $26,598. The implicit interest rate on the note receivable was 9%. Assume a 360-day year. CHART OF ACCOUNTSHooper Inc.General Ledger ASSETS111Cash121Accounts Receivable125Notes Receivable126Discount on Notes Receivable127Interest Receivable141Inventory152Prepaid Insurance181Equipment198Accumulated Depreciation LIABILITIES211Accounts Payable231Salaries Payable250Unearned Income261Income Taxes Payable EQUITY311Common Stock331Retained Earnings REVENUE411Sales Revenue431Interest Income EXPENSES500Cost of Goods Sold511Insurance Expense512Utilities Expense521Salaries Expense532Bad Debt Expense540Interest Expense541Depreciation Expense559Miscellaneous Expenses910Income Tax Expense Check the image section for journals. Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer's repayment on February 9, 2020, assuming an interest rate of 9% was assessed inaddition to the face value of the note.12345678DATEDec. 11, 2019Dec. 31, 2019Feb. 9, 2020Notes ReceivableSales RevenueInterest ReceivableInterest IncomeInterest IncomeInterest ReceivableCashNotes ReceivableGENERAL JOURNALACCOUNT TITLEPOST. REF.DEBITPAGE 12CREDIT Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer's repayment on February 9, 2020, assuming the note was issued as a $27,000 non-interest-bearing note with a present value of $26,598. The implicit interest rate on the note receivable was 9%. Assume a 360-day year.123456789DATEDec. 11, 2019Dec. 31, 2019Feb. 9, 2020Feb. 9, 2020Notes ReceivableSales RevenueDiscount on Notes ReceivableDiscount on Notes ReceivableInterest IncomeACCOUNT TITLEGENERAL JOURNALCashNotes ReceivableDiscount on Notes ReceivableInterest IncomePOST. REF.DEBITPAGE 12CREDIT

A note receivable is a promissory note form in which one person promises to pay the money to another…

Answered: Prepare the journal entries necessary…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a $27,000, 60-day note.

Required:

Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer’s repayment on February 9, 2020, assuming:

1.	Interest of 9% was assessed in addition to the face value of the note.
2.	The note was issued as a $27,000 non-interest-bearing note with a present value of $26,598. The implicit interest rate on the note receivable was 9%. Assume a 360-day year.

CHART OF ACCOUNTS

Hooper Inc.

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
125	Notes Receivable
126	Discount on Notes Receivable
127	Interest Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Income
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue
431	Interest Income

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

Check the image section for journals.

Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customer's repayment on February 9, 2020, assuming an interest rate of 9% was assessed in
addition to the face value of the note.
1
2
3
4
5
6
7
8
DATE
Dec. 11, 2019
Dec. 31, 2019
Feb. 9, 2020
Notes Receivable
Sales Revenue
Interest Receivable
Interest Income
Interest Income
Interest Receivable
Cash
Notes Receivable
GENERAL JOURNAL
ACCOUNT TITLE
POST. REF.
DEBIT
PAGE 12
CREDIT

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