To attract retailers to its shopping center, the Marketplace Mall will lend mone
ID: 2549671 • Letter: T
Question
To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants under formal contracts, provi loaned $90,000 to a new tenant on a one-year note with a stated annual interest rate of 9 percent. Interest is to be received by Marketplace Mall on April 30, 2015, and at maturity on October 31, 2015. at they use it to renovate their store space. On November 1, ,the company Required: Prepare journal entries that Marketplace Mall would record related to this note on the following dates: (a) November 1, 2014; (b) December 31, 2014 (Marketplace Mall's fiscal year-end); (c) April 30, 2015; and (d) October 31, 2015. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)Explanation / Answer
Journal entries in books of accounts of Market place Mall:
Loan for renovation a/c DR
To New Tenant a/c
(being loan given to new tenant @9%/anm)
New Tenant a/c DR
To Bank
(being amount deposited in bank a/c of new tenant)
Interest Receivable DR
To Interest Accrued
(being closing entry passed fo interest accrued for the period of 2 months (Nov to Dec 2014, 2 months))
Interest Receivable DR
To Interest Accrued
(being interest accrued for period b/w Jan 15 to april 15, 4 months)
Bank a/c DR
To Interest Receivable
(being interest recevied for first 6 months)
Interest Receivable a/c DR
To Interest accrued
(being interest accrued for secounf 6 months(may 15 to oct 15))
Bank a/c DR
To Interest Receivable
To Loan for renovation
(being loan paid back by new tenant along with interest)
$4050
$90000
Date Particulars Debit Credit 1 Nov/2014Loan for renovation a/c DR
To New Tenant a/c
(being loan given to new tenant @9%/anm)
$90000 $90000 1 Nov/2014New Tenant a/c DR
To Bank
(being amount deposited in bank a/c of new tenant)
$90000 $90000 31 dec 2014Interest Receivable DR
To Interest Accrued
(being closing entry passed fo interest accrued for the period of 2 months (Nov to Dec 2014, 2 months))
$1350 $1350 30 April 2015Interest Receivable DR
To Interest Accrued
(being interest accrued for period b/w Jan 15 to april 15, 4 months)
$2700 $2700 30 Aprl 2015Bank a/c DR
To Interest Receivable
(being interest recevied for first 6 months)
$4050 $4050 31 Oct 2015Interest Receivable a/c DR
To Interest accrued
(being interest accrued for secounf 6 months(may 15 to oct 15))
$4050 $4050 31 Oct 2015Bank a/c DR
To Interest Receivable
To Loan for renovation
(being loan paid back by new tenant along with interest)
$94050$4050
$90000
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