The financial statements of Bavarian Sausage Works (BSW) dated December 31, 2020, show $50,000 for "Note receivable." You learnthat the company provided $50,000 cash to a customer (a new chain of hot dog stands) in exchange for a promissory note. The note wasissued on January 1, 2019, bearing interest at 12% per year (which approximates the market interest rate), with principal and interest of$56,000 due on January 1, 2020. The hot dog chain has had numerous delays obtaining the required licences to operate on streetcorners. Consequently, on January 1, 2020, the chain and BSW renegotiated the promissory note so that the $56,000 in principal andinterest would come due on January 1, 2022. Aside from the initial recording of the note receivable on January 1, 2019, BSW has notrecorded any other journal entries relating to this note.RequiredProvide the necessary journal entries to correct BSW's accounts in 2019 and 2020.

In 2019, there is the requirement to put one journal entry to record promissory note which BSW has…

Answered: Required Provide the necessary journal…

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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Required Provide the necessary journal entries to correct BSW's accounts in 2019 and 2020