Exercise 8-10 Journalize the transactions for Elburn Supply Co. (Credit account

Question

Exercise 8-10

Journalize the transactions for Elburn Supply Co. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Use 360 days for calculation. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)

Record the collection of the Lopez note at its maturity in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 8-10

Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2017. The company does not make entries to accrue interest except at December 31.
Nov. 1 Loaned $14,000 cash to Manny Lopez on a 12-month, 12% note. Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $28,800, 90-day, 10% note. 16 Received a $28,600, 180 day, 12% note in exchange for Joe Fernetti’s outstanding accounts receivable. 31 Accrued interest revenue on all notes receivable.

Explanation / Answer

Journalize the transactions for Elburn Supply Co.

Record the collection of the Lopez note at its maturity in 2018

Date accounts & explanation debit credit Nov 1 Notes receivable-Manny Lopez 14000     Cash 14000 (To record loan given) Dec 11 Notes receivable-Ralph Kremer, Inc 28800     Sales revenue 28800 (To record goods sold) Dec 16 Notes receivable-Joe Fernetti’s 28600     Account receivable 28600 (To record note received) Dec 31 Interest receivable (14000*12%*60/360+28800*10%*20/360+28600*12%*15/360) 583      Interest revenue 583 (To record accured interest)

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