Question 3 (12 points) Alpha Company had the following events during FY 2017: Da

Question

Question 3 (12 points) Alpha Company had the following events during FY 2017: Date: Mar. 1 Accepted Bravo Company's 4 month, 9% note, as settlement of an outstanding Event $18,000 accounts receivable for goods sold in the prior year. Mar. 15 Sold, $27.200 of equipment (from merchandise inventory) to Charlie Company and accepted a 9 months, 6% note. Mar. 21 Loaned Delta Company $22,800 cash and accepted a 90 days, 9% note. June 19 Received payment from Delta Company. July 1 Received payment from Bravo Company. Dec. 16 Received payment from Charlie Company. Alpha Company uses the periodic system for inventory sales and prepares quarterly adjusting entries. Use this information to prepare the compound General Journal entries (without explanation) for all events related to the notes. Students may add the company names after the notes receivable account names to further identify the various subsidiary note transactions. Calculations for any interest must be done on a standard 360 day year for notes where the term is set in days. Use whole months (or fractions thereof) for notes with term limits set in months or years

Explanation / Answer

Journal Entries Date Account titles & explanations Debit Credit 1-Mar Note receivable 18,000 Account receivable-Bravo company 18,000 15-Mar Note receivable-Charlie 27,200 Account receivable 27,200 21-Mar Note receivable-Delta 22,800 Account receivable 22,800 19-Jun Cash 23,313 interest income (22800*9%*90/360) 513 note receivable 22,800 1-Jul Cash 18,540 interest income (18000*9%*4/12) 540 note receivable 18,000 16-Dec Cash 28215 interest income (27000*6%*9/12) 1215 note receivable 27000

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