On December 1, Howard Company received Brooks Company\'s $7,500, 60-day, 18% not

Question

On December 1, Howard Company received Brooks Company's $7,500, 60-day, 18% note receivable in settlement of a past due account. At the end of the fiscal year, on December 31, Howard Company accrued interest on the note. Required: Prepare the journal entries for Howard Company on December 1 and December 31. Note: To simplify the arithmetic in the problem, use 360 days for the number of days in a year. Date Account Title Debit Credit Dec. 1 (Choose one) oose one Accounts Payable Brooks Co Accounts Payable - Howard Co. Accounts Receivable - Brooks Co. Accounts Receivable- Howard Co Cash Interest Receivable Interest Revenue Notes Receivable Clear Undo H Help Next >> I don't know

Explanation / Answer

Journal Etnry Date Account titles Debit Credit 1-Dec Notes receivable 7,500 Accounts receivable-Brooks co 7,500 31-Dec interest receivable 112.5 interest recenue 112.5 (7500*18%*30/360)

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