Chapter 5, Problem 5.60AP

(Learning Objective 6: Apply GAAP for notes receivable) Markley Foods completed The following selected transactions.

2018
Oct 31	Sold goods to Basic Foods, receiving a $30,000, three-month, 5.25% note. (You do not need to make the cost of goods sold journal entry for this transaction.)
Dec 31	Made an adjusting entry to accrue interest on the Basic Foods note.
2019
Jan 31	Collected the Basic Foods note.
Nov 11	Loaned $15,800 cash to Strafford Shops, receiving a 90-day, 10.0% note.
Dec 31	Accrued the interest on the Strafford Shops note.

Requirements

1. Record the transactions in Markley Foods’ journal. Assume that no sales returns are expected. Round all amounts to the nearest dollar. Explanations are not required.

2. Show what Markley Foods will report on its comparative classified balance sheet at December 31, 2019, and December 31, 2018, for Notes Receivable and lnterest Receivable.