Explanation Note receivable: Note receivable refers to a written promise for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to lender or creditor. Notes receivable is an asset of a business. Interest on note: Interest on note is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender. Journalize the entries to record the transactions. Date Account Title and Explanation Debit ($) Credit ($) December 3, 2015 Notes receivable 36,000 Accounts receivable – Company C 36,000 ( To record the money loaned on note) December 31, 2015 Interest receivable 168 Interest revenue (1) 168 ( To record the interest revenue accrued on the note) December 31, 2015 Interest revenue 168 Income summary 168 ( To close the interest revenue account) March, 2 2016 Cash 36,540 Notes receivable 36,000 Interest receivable (1) 168 Interest revenue (2) 372 ( To record the collection of cash on note in full) Table (1) Working note (1): Calculate the amount of interest revenue accrued as on December 31, 2015. Interest revenue accrued as on December 31, 2015 } = [ Notes Receivable×Interest rate× Time in terms of one year ] = $36,000×6%× Number of days accrued from December 3 till December 31 360 days = $36,000×6%× 28 days 360 days =$168 Working note (1): Calculate the amount of interest revenue earned for the period from January 1 to March 2

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ISBN: 9781305088436

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Chapter 9, Problem 22E

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Journalize the entries, to record the transactions.

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Chapter 9, Problem 21E

Chapter 9, Problem 23E

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Chapter 9 Solutions

Financial Accounting

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Journalize the entries , to record the transactions.

Solution Summary: The author explains that note receivable refers to a written promise for the amounts to be received within the stipulated period of time. Interest on note is the amount charged on the principal value of note.

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Journalize the entries, to record the transactions.

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Chapter 9 Solutions