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Business, 15.07.2020 17:01 ghari112345

Scott Distributors has the following transactions related to notes receivable during the last two months of the year. Dec. 1 Loaned $16,000 cash to E. Kinder on a 1-year, 6% note.
16 Sold goods to J. Jones, receiving a $4,800, 60-day, 7% note.
31 Accrued interest revenue on all notes receivable.
Instructions:
Journalize the transactions for Trent Distributors.

Answers

ansver
Answer from: starlightmoon213

Dec 1

Dr Notes Receivable 16,000

Cr Cash 16,000

Dec 16

Dr Notes Receivable 4,800

Cr Sales Revenue 4,800

Dec. 31

Dr Interest Receivable 94

Cr Interest Revenue 94

Explanation:

Preparation of Scott Distributors Journal entry

Since we are told that on Dec. 1 Scott Distributors was tend to Loaned tha amount of $16,000 cash to E. Kinder which was on a 1-year, 6% note this means the transaction will be recorded as:

Dec 1

Dr Notes Receivable 16,000

Cr Cash 16,000

Since we were told that Scott Distributors Sold goods to J. Jones by receiving a sum of $4,800, 60-day, 7% note this means the transaction will be recorded as :

Dec 16

Dr Notes Receivable 4,800

Cr Sales Revenue 4,800

The Accrued interest revenue on all notes receivable transactions will be recorded as:

Dec. 31

Dr Interest Receivable 94

Cr Interest Revenue 94

Computation of interest revenue for E. Kinder note and J. Jones

E.kinder=

The amount of $16,000 *0.06*30/360

= $80

Jones note=

The amount of 4,800 *0.07×15/360

= 14

Total accrued interest (80+14)

$94

ansver
Answer from: jakobrobinette

Dec. 1

Note Receivable : E. Kinder $16,000 (debit)

Cash $16,000 (credit)

Dec. 16

Note Receivable : J. Jones $4,800 (debit)

Sales $4,800 (credit)

Dec. 31

Note Receivable : E. Kinder $80 (debit)

Note Receivable : J. Jones $168 (debit)

Interest Income $248 (credit)

Explanation:

Interest accruing on E. Kinder`s Note Receivable = $16,000 × 6 % × 1/12 = $80.

Interest accruing on J. Jones`s Note Receivable = $4,800 × 7 % × 30/60= $168.

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