Need help with the last part regarding cash and interest recievable they are inc
ID: 2503569 • Letter: N
Question
Need help with the last part regarding cash and interest recievable they are incorrect
Orosco Supply Co. has the following transactions related to notes receivable during the last 2 month Nov. 1 Loaned dollar 14,800 cash to Sally Givens on a 1-year, 10% note. Dec. 11 Sold goods to John Countryman, Inc., receiving a dollar 6,900, 90-day, 9% note. 16 Received a dollar 4,000, 6-month, 8% note in exchange for Bob Reber's outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable. the collection of the Givens note at its maturity in 2012. (for multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, id answers to O decimal places, )Explanation / Answer
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Orosco Supply Co. has the following transactions related to notes receivable during the last 2 months of 2010.
Nov. 1 Loaned $15,000 cash to Sally Givens on a 1-year, 10% note.
Dec. 11 Sold goods to John Countryman, Inc., receiving a $6,750, 90-day, 8% note.
16 Received a $4,000, 6-month, 9% note in exchange for Bob Reber's outstanding accounts receivable.
31 Accrued interest revenue on all notes receivable.
Dec. 16 Debit---Accounts Receivable 4,000(correct). Credit Notes Receivable 4,000(correct)
It's the other way around. You are receiving the note as replacement for the Accounts Receivable.
Dr Note Receivable 4,000
Cr Accounts Receivable 4,000
Dec. 31 Debit---Interest Revenue. Credit Notes Receivable
15,000 x 10% x 2/12 = 250
6,750 x 8% x 20/360 = 30
4,000 x 9% x 1/24 = 15
Total accrued revenue at Dec. 31 = 295
Dr Interest Receivable 295
Cr Interest Revenue 295
Record the collection of the Givens note at its maturity in 2011
Nov. 1
15,000 x 10% x 10/12 = 1,250 revenue accrued after Dec. 31
Dr Cash 16,500
Cr Notes Receivable 15,000
Cr Interest Revenue 1,250
Cr Interest Receivable 250
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