Chapter 8, Problem 12ME

Recording Note Receivable Transactions

RecRoom Equipment Company received an $8,000, six-month, 6 percent note to settle an $8,000 unpaid balance owed by a customer. Prepare journal entries to record the following transactions for RecRoom. Rather than use letters to reference each transaction, use the date of the transaction.

1. a. The note is accepted by RecRoom on November 1, causing the company to increase its Notes Receivable and decrease its Accounts Receivable.
2. b. RecRoom adjusts its records for interest earned to its December 31 year-end.
3. c. RecRoom receives the interest on the note’s maturity date.
4. d. RecRoom receives the principal on the note’s maturity date.