Entries for Notes Receivable, Including Year-End Entries The following selected

Question

Entries for Notes Receivable, Including Year-End Entries The following selected transactions were completed by Fasteners Inc. Co, a supplier of buttons and zippers for clothing: 20Y3 Received from McKenna Outer wear Co., on account, a $95,000, 60-day, 3% note dated November 21 in settlement of a past due account. Nov. 21, Dec. 31 Recorded an adjusting entry for accrued interest on the note of November 21 20Y4 Jan. 20. Rived payment of note and interest from McKenna Outer Wear Co Journalize the entries to record the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Assume a 360-day year when calculating interest 20Y3, Nov. 21 Dec. 31 20Y4, Jan. 20

Explanation / Answer

21-Nov Notes receivable 96000         Accounts Receivable-Mckenna Outer Wear Co. 96000 31-Dec Interest receivable 320 =96000*3%/360*40        Interest revenue 320 20-Jan Cash 96480        Interest receivable 320        Interest revenue 160 =96000*3%/360*20        Notes receivable 96000

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