QS 7-14 (Algo) Note receivable interest and maturity LO P4 On December 1, Daw Company accepts a $26,000, 45-day, 6% note from a customer. (1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31. (2) Prepare the entry required on the note's maturity date assuming it is honored. Note: Use 360 days a year.
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.
QS 7-14 (Algo) Note receivable interest and maturity LO P4
On December 1, Daw Company accepts a $26,000, 45-day, 6% note from a customer.
(1) Prepare the year-end
(2) Prepare the entry required on the note's maturity date assuming it is honored.
Note: Use 360 days a year.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
