The following transactions took place for Smart Solutions Inc. 2014 a. July 1 b.

Question

The following transactions took place for Smart Solutions Inc. 2014 a. July 1 b. Dec. Loaned $60,000 to an employee of the company and received back a one-year, 8 percent note Accrued interest on the note. 31 2015 c. July Received interest on the note. (No interest has been recorded since 1 December 31.) d. July eceved principal on the note. Required: Prepare the journal entries that Smart Solutions Inc. would record for the above transactions. (If no entry is required for a transactionlevent, select No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the receipt of a note on July 1, 2014 for a $60,000 loan to an employee. Note: Enter debits before credits. ebit 60,000 2014 Record entry View general journal

Explanation / Answer

Date General Journal Debit Credit July 1 Notes receivable $60,000 Cash $60,000 Dec. 31 Interest receivable($60,000 * 8% * 6/12) $2,400 Interest revenue $2,400 July 1 Cash $4,800 Interest receivable $2,400 Interest revenue $2,400 July 1 Cash $60,000 Notes receivable $60,000

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