Do It! Review 8-3 (Part Level Submission) Tamarisk, Inc. accepts from Gates Stor

Question

Do It! Review 8-3 (Part Level Submission)

Tamarisk, Inc. accepts from Gates Stores a $5,800, 4-month, 12% note dated May 31 in settlement of Gates’ overdue account. The maturity date of the note is September 30.

(a)

Open Show Work

SHOW LIST OF ACCOUNTS

SHOW SOLUTION

LINK TO TEXT

(b)

Account Titles and Explanation

Debit

Credit

(To record collection of Gates note and interest)

Do It! Review 8-3 (Part Level Submission)

Tamarisk, Inc. accepts from Gates Stores a $5,800, 4-month, 12% note dated May 31 in settlement of Gates’ overdue account. The maturity date of the note is September 30.

Explanation / Answer

a. Interest = $232.00

Working:

Note Receivable value 5800 Rate of interest 12% Period 4 months Interest amount (5,800 x 12% x 4 / 12) 232

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