4.) JOURNAL ENTRIES NOTE RECEIVED, RENEWED, AND COLLECTED) Prepare general journ
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4.) JOURNAL ENTRIES NOTE RECEIVED, RENEWED, AND COLLECTED) Prepare general journal entries for the following transactions: May 22 Received a 30-day, 9% note in payment for merchandise sale of $22,000. June 21 Received $165.00 cash (interest) on the old (May 22) note; the old note is renewed for 30 days at 10%. July 21 Received principal and interest on the new (June 21) note. 28 Received a 45-day, 7% note in payment for accounts receivable balance of $11,600. Sept. 11 Received $101.50 cash (interest) plus $1,600 principal on the old (July 28) note; the old note is renewed for 60 days (from September 11) at 9%. Nov. 10 Received principal and interest on the new (September 11) note.Explanation / Answer
May 22 Received a 30-day, 9% note in payment for merchandise sale of $22,000. May 22 Note Rxable Dr 22,000 Sales Cr 22,000 June 21 Received $165.00 cash (interest) on the old (May 22) note; the old note is renewed for 30 days at 10%. Jun 21 Note Rxable (Nw Note) Dr 22,000 Cash Dr 165 Int on Note Rxable Cr 165 Note Rxable Old Note Cr 22,000 July 21 Received principal and interest on the new (June 21) note. Jul 21 Cash Dr 22,183 Int on Note Rxable Cr $183 Note Rxable Cr 22,000 (Int = 22000*10%/12 = $183) Jul 28 Received a 45-day, 7% note in payment for accounts receivable balance of $11,600. Jul 28 Note Rxable Dr 11,600 Acct Rxable Cr 11,600 Sept. 11 Received $101.50 cash (interest) plus $1,600 principal on the old (July 28) note; the old note is renewed for 60 days (from September 11) at 9%. Sep 11 Note Rxable (new) Dr 10,000 Cash Dr 1701.50 Int on Note Rx Cr 101.50 Note Rxable (old) Cr 11,600 Nov. 10 Received principal and interest on the new (September 11) note Nov 10 Cash Dr 10,150 Int on Note Rxable Cr 150 Note Rxable Cr 10,000 (Int = 9%*10000*2/12 = $150)
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