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 Figure (1) are given below : To record the receipt of note receivable on December 06, 2017: 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, 2017: 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, 2018: 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, 2018: 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, 2018: 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, 2018: 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, 2018: 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 (5th Edition)

5th Edition

ISBN: 9780134728520

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by t…

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable ari…

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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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Looking for answers asap. Thanks! Analyze and review the following items and determine the appropriate journal entry. Notes Payable This is a short-term note. The company borrowed money from JRT Investments on October 31, 2020 for 3 months. The principal, along with interest is to be repaid on January 31, 2021. The interest rate is 1.8%. Notes Payable = $250,000

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eBook Show Me How Proceeds from Notes Payable On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 60-day note with a face amount of $39,600. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 6%. b. Determine the proceeds of the note, assuming the note is discounted at 6%. Check My Work Email Instructor Save and Exit Previous Submit Assignme

Chapter 7 Solutions

Financial Accounting, Student Value Edition (5th 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. 8BP 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 - Aging of accounts receivable allowance method...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 - Accounting for notes receivable (Learning...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 - Financial Analysis Purpose: To help familiarize...Ch. 7 - Industry Analysis Purpose: To help you understand...Ch. 7 - Prob. 1SBA Ch. 7 - Prob. 1WC

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Record the transactions in the journal of Incorporation SW.

Solution Summary: The author explains that notes receivable refers to a written promise by the debtor for the amounts to be received within 60-90 days or longer.

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