Explanation Note 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. a. Prepare journal entry in the books of Corporation N to record the promissory note received against money lendon January 1. Date Account Title and Explanation Debit ($) Credit ($) January 1 Notes receivable 20,000 Cash 20,000 ( To record the acceptance of the note receivable) Table (1) Note Receivable is an asset account, and acceptance of note has increased the value of the asset, so debit it. Cash is an asset account, and it has decreased the value of the asset, so credit it. b. Prepare journal entry in the books of Corporation N to collection of interest on maturity date. Date Account Title and Explanation Debit ($) Credit ($) June 30 Cash 700 Interest Revenue 700 ( To record accrued interest revenue) Table (2) Working Notes: Calculate the amount of interest revenue earned and received on note, at maturity date...

6th Edition

ISBN: 9781260159516

Author: PHILLIPS

Publisher: MCG

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Chapter 8, Problem 11ME

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To prepare: The journal entries to record the transactions of Corporation N.

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The journal entries to record the transactions of Corporation N.

Solution Summary: The author explains that note receivable refers to a written promise by the debtor to the lender or, creditor.

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To prepare: The journal entries to record the transactions of Corporation N.

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