Oct. 1 - Sold $17,500 of merchandise on account, 1/10, n/30 to McCormick Industr

Question

Oct. 1 - Sold $17,500 of merchandise on account, 1/10, n/30 to McCormick Industries. Nov. 1 - Received a $17,500, 90-day, 9% note from McCormick Industries to settle its $17,5C balance. Dec. 31 - Accrued interest on the note. Jan. 31 - Received the interest on the note's maturity date. Jan. 31 - Received the principal on the note's maturity date.repare the required journal entries. (Kound your answer to the nearest whole dollar amount, it no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

a. Oct Accounts Receivable 17500 To Sales 17500 b 1-Nov Notes Receivable Dr 17500 To Accounts Receivable 17500 c Interest 17500*9%*2/12 262.5 31-Dec Interest accrued 262.5 To Interest Income 262.5 d Cash Dr 17893.5 To Interest Accrued 262.5 To Interest Income 131 ( 17500*9%*90/365-262.5) To Notes Receivable 17500

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