The following transactions took place for Parker s Grocery. Loaned $50,000 to a

Question

The following transactions took place for Parker s Grocery. Loaned $50,000 to a cashier of the company and received back a one-year, 8 percent not b June 30 Accrued interest on the note. Received interest on the note (No interest has been recorded since June 30.) d Dec 31 Received principal on the note. Required: Prepare the journal entries that Parker's Grocery would record for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

Solution:

Journal Entries:

Date General Journal Debit Credit 1-Jan Notes receivable    50,000 Cash    50,000 30-Jun Interest receivable      2,000 Interest revenue      2,000 (50,000 * 8/100 * 6/12) 31-Dec Cash      4,000 Interest receivable      2,000 Interest revenue      2,000 (50,000 * 8%) Cash    50,000 Notes receivable    50,000

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