Explanation Notes receivable: Note receivable refers to a written promise by the debtor for the amounts to be received within a stipulated period of 60-90 days or longer time. This written promise is issued by a debtor or, a borrower to the lender or, creditor. Notes receivable is an asset of a business. Explanation of Journal entries in Table (1) are given below : To record the receipt of note receivable on December 06: Note receivable is an asset account. There is an increase in asset by $3,800. Thus, it is debited. Accounts receivable is an asset account. There is a decrease in the asset by $3,800. Thus, it is credited. To record the accrual of interest on note receivable on December 31: Interest receivable is an asset. It will be increased on the accrual of interest by $16. Thus, interest receivable is credited. Interest revenue is a component of retained earnings that increases the retained earnings. Hence, it is credited by $16. To record the collection of note on March 05: Cash is an asset. Collection of notes from customers increases the asset. Hence, it is debited by $3,857. Notes receivable is an asset. It will be eliminated or decreased, when the amount of loan is collected from customers. Thus, it is credited by $3,800. Interest receivable is an asset. It will be eliminated or decreased on the date of maturity. Thus, interest receivable is credited by $16. Interest revenue is a component of retained earnings that increases the retained earnings. Hence, it is credited by $41. To record the amount lent to Company JA on June 01: Note receivable is an asset account. There is an increase in asset by $2,000. Thus, it is debited. Cash is an asset account. There is a decrease in asset by $2,000. Hence, it is credited. To record the receipt of note from Incorporation MB on October 31: Note receivable is an asset account. There is an increase in asset by $3,250. Thus, it is debited. Accounts receivable is an asset account. Collections from customers decrease the accounts receivable by $3,250. Hence, it is credited. To record the collection of maturity value on December 01: Cash is an asset. Collection of principal amount and interest amount from the notes receivable increases the asset. Hence, it is debited by $2,080. Notes receivable is an asset. It will be eliminated or decreased, when the amount of loan is collected from customers. Thus, it is credited by $2,000. Interest receivable is an asset. It will be eliminated or decreased on the date of maturity. Thus, interest receivable is credited by $80. To record the accrual of interest on note receivable on December 31: Interest receivable is an asset. It will be increased on the accrual of interest by $50. Thus, interest receivable is credited. Interest revenue is a component of retained earnings that increases the retained earnings. Hence, it is credited by $50. Working Note: Determine the amount of Interest revenue as given below...

Financial Accounting, Student Value Edition (4th Edition)

4th Edition

ISBN: 9780134114811

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

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Chapter 7, Problem 54BP

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Record the transactions in the journal of Incorporation SW.

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Chapter 7, Problem 53BP

Chapter 7, Problem 55BP

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Chapter 7 Solutions

Financial Accounting, Student Value Edition (4th Edition)

Ch. 7.A - Prob. 1SE Ch. 7.A - Prob. 2SE Ch. 7.A - Prob. 3AE Ch. 7.A - Prob. 4AE Ch. 7.A - Prob. 5BE Ch. 7.A - Prob. 6BE Ch. 7.A - Prob. 7AP Ch. 7.A - Prob. 8AP Ch. 7 - Which duties should be segregated in the...Ch. 7 - Prob. 2DQ

Ch. 7 - Prob. 3DQ Ch. 7 - Why does the allowance method of accounting for...Ch. 7 - Prob. 5DQ Ch. 7 - Prob. 6DQ Ch. 7 - Prob. 7DQ Ch. 7 - How would the net realizable value of Accounts...Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ Ch. 7 - Prob. 1SC Ch. 7 - Prob. 2SC Ch. 7 - Prob. 3SC Ch. 7 - Prob. 4SC Ch. 7 - Prob. 5SC Ch. 7 - Prob. 6SC Ch. 7 - Prob. 7SC Ch. 7 - Prob. 8SC Ch. 7 - Prob. 9SC Ch. 7 - Prob. 10SC Ch. 7 - Prob. 11SC Ch. 7 - Prob. 12SC Ch. 7 - Prob. 1SE Ch. 7 - Prob. 2SE Ch. 7 - Prob. 3SE Ch. 7 - Prob. 4SE Ch. 7 - Prob. 5SE Ch. 7 - Prob. 6SE Ch. 7 - Prob. 7SE Ch. 7 - Prob. 8SE Ch. 7 - Prob. 9SE Ch. 7 - Prob. 10SE Ch. 7 - Prob. 11SE Ch. 7 - Prob. 12SE Ch. 7 - Prob. 13SE Ch. 7 - Prob. 14SE Ch. 7 - Prob. 15SE Ch. 7 - Quick ratio (Learning Objective 7) 510 min....Ch. 7 - Prob. 17SE Ch. 7 - Prob. 18AE Ch. 7 - Prob. 19AE Ch. 7 - Prob. 20AE Ch. 7 - Prob. 21AE Ch. 7 - Prob. 22AE Ch. 7 - Prob. 23AE Ch. 7 - Prob. 24AE Ch. 7 - Prob. 25AE Ch. 7 - Prob. 26AE Ch. 7 - Prob. 27AE Ch. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 29AE Ch. 7 - Prob. 30BE Ch. 7 - Prob. 31BE Ch. 7 - Prob. 32BE Ch. 7 - Prob. 33BE Ch. 7 - Prob. 34BE Ch. 7 - Prob. 35BE Ch. 7 - Prob. 36BE Ch. 7 - Prob. 37BE Ch. 7 - Prob. 38BE Ch. 7 - Prob. 39BE Ch. 7 - Quick ratio and current ratio (Learning Objective...Ch. 7 - Prob. 41BE Ch. 7 - Prob. 42AP Ch. 7 - Prob. 43AP Ch. 7 - Prob. 44AP Ch. 7 - Prob. 45AP Ch. 7 - Prob. 46AP Ch. 7 - Prob. 47AP Ch. 7 - Prob. 48AP Ch. 7 - Prob. 49BP Ch. 7 - Prob. 50BP Ch. 7 - Prob. 51BP Ch. 7 - Prob. 52BP Ch. 7 - Prob. 53BP Ch. 7 - Prob. 54BP Ch. 7 - Prob. 55BP Ch. 7 - Continuing Exercise In this exercise, we continue...Ch. 7 - Prob. 1CP Ch. 7 - Prob. 1CFSAP Ch. 7 - Prob. 1EIA Ch. 7 - Prob. 2EIA Ch. 7 - Prob. 1FA Ch. 7 - Prob. 1IA Ch. 7 - Prob. 1SBA Ch. 7 - Prob. 1WC

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