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Record the journal entries for Bank’s Hardware Store for the following transactions. If an amount box does not require an entry, leave it blank. A. Note issuance. B. Subsequent interest entry on December 31, 2018. C. Honored note entry at maturity on December 31, 2019.

Record the journal entries for Bank’s Hardware Store for the following transactions. If an amount box does not require an entry, leave it blank. A. Note issuance. B. Subsequent interest entry on December 31, 2018. C. Honored note entry at maturity on December 31, 2019.

FINANCIAL ACCOUNTING
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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Arvan Patel is a customer of Bank's Hardware Store. For Mr. Patel's latest purchase on January 1, 2018, Bank's Hardware issues a note with a principal amount of $500,000, 15% annual interest rate, and a 24-month maturity date on December 31, 2019.

Record the journal entries for Bank’s Hardware Store for the following transactions. If an amount box does not require an entry, leave it blank.

A. Note issuance.

B. Subsequent interest entry on December 31, 2018.

C. Honored note entry at maturity on December 31, 2019.

**Journal Entries for Bank’s Hardware Store** Arvan Patel is a customer of Bank’s Hardware Store. For Mr. Patel’s latest purchase on January 1, 2018, Bank’s Hardware issues a note with a principal amount of $500,000, a 15% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Bank’s Hardware Store for the following transactions. If an amount box does not require an entry, leave it blank. **A. Note Issuance** - *Jan. 1, 2018* - **Debit**: Notes Receivable: Patel $500,000 - **Credit**: Sales Revenue $500,000 **B. Subsequent Interest Entry on December 31, 2018** - *Dec. 31, 2018* - **Debit**: Interest Receivable: Patel $15,000 - **Credit**: Interest Revenue $15,000 **C. Honored Note Entry at Maturity on December 31, 2019** - *Dec. 31, 2019* - **Debit**: Cash [Blank] - **Credit**: Notes Receivable: Patel [Blank] - **Credit**: Interest Receivable: Patel [Blank]
Transcribed Image Text:**Journal Entries for Bank’s Hardware Store** Arvan Patel is a customer of Bank’s Hardware Store. For Mr. Patel’s latest purchase on January 1, 2018, Bank’s Hardware issues a note with a principal amount of $500,000, a 15% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Bank’s Hardware Store for the following transactions. If an amount box does not require an entry, leave it blank. **A. Note Issuance** - *Jan. 1, 2018* - **Debit**: Notes Receivable: Patel $500,000 - **Credit**: Sales Revenue $500,000 **B. Subsequent Interest Entry on December 31, 2018** - *Dec. 31, 2018* - **Debit**: Interest Receivable: Patel $15,000 - **Credit**: Interest Revenue $15,000 **C. Honored Note Entry at Maturity on December 31, 2019** - *Dec. 31, 2019* - **Debit**: Cash [Blank] - **Credit**: Notes Receivable: Patel [Blank] - **Credit**: Interest Receivable: Patel [Blank]
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