value 9.00 points Stinson Company recently agreed to loan an employee $130,000 f
ID: 2410729 • Letter: V
Question
value 9.00 points Stinson Company recently agreed to loan an employee $130,000 for the purchase of a new house. The loan was executed on May 31, 2015, and is a one-year, 5 percent note, with interest payments required on November 30.2015, and May 31, 2016. Stinson issues quarterly financial statements on March 31, June 30 September 30, and December 31 Required: 1. Prepare the journal entry that Stinson will make when the note is established. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the receipt of a note on May 31, 2015 for a $130,000 loan to an employee. Note: Enter debits before credits. Date General Journal Debit Credit May 31, 2015 Record entry Clear entry View general journalExplanation / Answer
General Journal
Debit
Credit
Notes Receivable
130000
Cash
130000
2) Prepare the journal entries that Stinson will make to record the interest accruals at each quarter end and interest payments at each payment date.
Date
General Journal
Debit
Credit
June 30,2015
Interest Receivable
542
Interest Revenue
542
(130000 x 5% x 1/12)
Sept 30,2015
Interest Receivable
1625
Interest Revenue
1625
130000 x 5% x 3/12
Nov 30,2015
Cash
3250
Interest Revenue
1083
Interest Receivable
2167
130000 x 5% x 2/12
Dec 31, 2015
Interest Receivable
542
Interest Revenue
542
130000 x 5% x 1/12
March 31, 2015
Interest Receivable
1625
Interest Revenue
1625
130000 x 5% x 3/12
3) Prepare the journal entry that Stinson will make to record the principal payment at the maturity date.
General Journal
Debit
Credit
Cash
133250
Interest Receivable
2167
Interest Revenue
1083
Notes Receivable
130000
130000 x 5% x 2/12 = 1083
General Journal
Debit
Credit
Notes Receivable
130000
Cash
130000
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