Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 10%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 12%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No Journal entry required" In the first account fleld.)
Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 10%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 12%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No Journal entry required" In the first account fleld.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 7-26 (Algo) Discounting a note receivable [LO7-8]
Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 10%, is due
on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 12%.
Required:
Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the
discounting is accounted for as a sale. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select
"No Journal entry required" In the first account fleld.)
View transaction list
Journal entry worksheet
1 2
<
Record the accrued interest earned.
Note: Enter debits before credits.
Date
February 28, 2021
Record entry
General Journal
Clear entry
Debit
Credit
View general journal](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05848523-8d3f-47c3-aa28-13696e328ead%2F02d6374c-a0cc-49bb-8772-75645895fc0d%2Fung2t3_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 7-26 (Algo) Discounting a note receivable [LO7-8]
Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 10%, is due
on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 12%.
Required:
Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the
discounting is accounted for as a sale. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select
"No Journal entry required" In the first account fleld.)
View transaction list
Journal entry worksheet
1 2
<
Record the accrued interest earned.
Note: Enter debits before credits.
Date
February 28, 2021
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
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