Accounting for Notes Receivable Sloan Systems sells voice mail systems to small

Question

Accounting for Notes Receivable

Sloan Systems sells voice mail systems to small businesses. Sloan engaged in the following activities involving notes receivable (round to nearest dollar):

On October 1, 2013, Sloan sold an $8,000 system to Majors Company. Majors gave Sloan a 7-month, 10% note as payment.

On November 1, 2013, Sloan sold a $6,000 system to Hadley Inc. Hadley gave Sloan a 10-month, 12% note as payment.

On May 1, 2014, Majors paid the amount due on its note.

On September 1, 2014, Hadley paid the amount due on its note.

Prepare the necessary journal and adjusting entries for Sloan Systems to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Note from Majors Company:

Account and Explanation

Debit

Credit

2013 Oct. 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 6 of Item 1

Correct 7 of Item 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 8 of Item 1

Correct 9 of Item 1

Record sale

2013 Dec. 31

Cash

Interest Income

Interest Receivable

Interest Payable

Sales Revenue

Correct 12 of Item 1

Correct 13 of Item 1

Interest Income

Interest Receivable

Notes Payable

Notes Receivable

Sales Revenue

Correct 14 of Item 1

Correct 15 of Item 1

Record accrued interest income

2014 May. 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 18 of Item 1

Correct 19 of Item 1

Correct 20 of Item 1

Cash

Interest Payable

Notes Payable

Notes Receivable

Sales Revenue

Correct 21 of Item 1

Correct 22 of Item 1

Correct 23 of Item 1

Cash

Interest Expense

Interest Payable

Interest Receivable

Notes Payable

Correct 24 of Item 1

Correct 25 of Item 1

Correct 26 of Item 1

Accounts Receivable

Cash

Interest Income

Interest Payable

Sales Revenue

Correct 27 of Item 1

Correct 28 of Item 1

Correct 29 of Item 1

Record collection of note receivable

For a compound transaction, if an amount box does not require an entry, leave it blank.

Account and Explanation

Debit

Credit

2013 Nov. 1

Cash

Interest Income

Notes Payable

Notes Receivable

Sales Revenue

Correct 6 of Item 2

Correct 7 of Item 2

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 8 of Item 2

Correct 9 of Item 2

Record sale

2013 Dec. 31

Accounts Payable

Cash

Interest Income

Interest Receivable

Notes Receivable

Correct 12 of Item 2

Correct 13 of Item 2

Cash

Interest Income

Interest Payable

Notes Receivable

Sales Revenue

Correct 14 of Item 2

Correct 15 of Item 2

Record accrued interest income

2014 Sept. 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Unearned Sales Revenue

Correct 18 of Item 2

Correct 19 of Item 2

Correct 20 of Item 2

Accounts Receivable

Interest Payable

Notes Payable

Notes Receivable

Sales Revenue

Correct 21 of Item 2

Correct 22 of Item 2

Correct 23 of Item 2

Cash

Interest Payable

Interest Receivable

Notes Payable

Sales Revenue

Correct 24 of Item 2

Correct 25 of Item 2

Correct 26 of Item 2

Accounts Payable

Cash

Interest Income

Interest Payable

Sales Revenue

Unearned Sales Revenue

Correct 27 of Item 2

Correct 28 of Item 2

Correct 29 of Item 2

Record collection of note receivable

Account and Explanation

Debit

Credit

2013 Oct. 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 6 of Item 1

Correct 7 of Item 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 8 of Item 1

Correct 9 of Item 1

Record sale

2013 Dec. 31

Cash

Interest Income

Interest Receivable

Interest Payable

Sales Revenue

Correct 12 of Item 1

Correct 13 of Item 1

Interest Income

Interest Receivable

Notes Payable

Notes Receivable

Sales Revenue

Correct 14 of Item 1

Correct 15 of Item 1

Record accrued interest income

2014 May. 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 18 of Item 1

Correct 19 of Item 1

Correct 20 of Item 1

Cash

Interest Payable

Notes Payable

Notes Receivable

Sales Revenue

Correct 21 of Item 1

Correct 22 of Item 1

Correct 23 of Item 1

Cash

Interest Expense

Interest Payable

Interest Receivable

Notes Payable

Correct 24 of Item 1

Correct 25 of Item 1

Correct 26 of Item 1

Accounts Receivable

Cash

Interest Income

Interest Payable

Sales Revenue

Correct 27 of Item 1

Correct 28 of Item 1

Correct 29 of Item 1

Record collection of note receivable

For a compound transaction, if an amount box does not require an entry, leave it blank.

Account and Explanation

Debit

Credit

2013 Nov. 1

Cash

Interest Income

Notes Payable

Notes Receivable

Sales Revenue

Correct 6 of Item 2

Correct 7 of Item 2

Cash

Interest Income

Interest Receivable

Notes Receivable

Sales Revenue

Correct 8 of Item 2

Correct 9 of Item 2

Record sale

2013 Dec. 31

Accounts Payable

Cash

Interest Income

Interest Receivable

Notes Receivable

Correct 12 of Item 2

Correct 13 of Item 2

Cash

Interest Income

Interest Payable

Notes Receivable

Sales Revenue

Correct 14 of Item 2

Correct 15 of Item 2

Record accrued interest income

2014 Sept. 1

Cash

Interest Income

Interest Receivable

Notes Receivable

Unearned Sales Revenue

Correct 18 of Item 2

Correct 19 of Item 2

Correct 20 of Item 2

Accounts Receivable

Interest Payable

Notes Payable

Notes Receivable

Sales Revenue

Correct 21 of Item 2

Correct 22 of Item 2

Correct 23 of Item 2

Cash

Interest Payable

Interest Receivable

Notes Payable

Sales Revenue

Correct 24 of Item 2

Correct 25 of Item 2

Correct 26 of Item 2

Accounts Payable

Cash

Interest Income

Interest Payable

Sales Revenue

Unearned Sales Revenue

Correct 27 of Item 2

Correct 28 of Item 2

Correct 29 of Item 2

Record collection of note receivable

Explanation / Answer

Sloan System Accounting for Notes Receivable Date Account Title Dr $ Cr $ Oct 1.2013. Sales Revenue              8,000 Notes Receivable                8,000 Nov 1. 2013. Sales Revenue              6,000 Notes Receivable                6,000 Dec 31.2013. Interest Income                 202 Interest Income                    202 (interest accrued on Major Notes assuming 365 days year, for 92 days) Interest Receivable           120.33 Interest Receivable              120.33 (interest accrued on Hadley Notes assuming 365 days year, for 61 days) May 1.2014. Cash                8,465 Interest Income                 263 Interest Receivable                 202 Notes Receivable              8,000 ( Major notes paid) Sep 1. 2014. Cash          6,599.67 Interest Income           120.33 Interest Receivable           479.34 Notes Receivable              6,000 ( Hadley notes paid)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.