Question

On December 1, Klien Corporation accepted a 120​-day, 6​%, $14,600 note receivable from J. Silverthorn in exchange for his account receivable.

1.	Journalize the transaction on December 1.
2.	Journalize the adjusting entry needed on December 31 to accrue interest revenue. Round to the nearest dollar.
3.	Journalize the collection of the principal and interest at maturity. Specify the date. Round to the nearest dollar.

Date		Accounts and Explanation	Debit	Credit
Dec.	1

Requirement 2. Journalize the adjusting entry needed on

December

31 to accrue interest revenue. Round to the nearest dollar. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry table. For notes stated in​ days, use a

365​-day

​year.)

Date		Accounts and Explanation	Debit	Credit
Dec.	31

Requirement 3. Journalize the collection of the principal and interest at maturity. Specify the date. Round to the nearest dollar. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry table. For notes stated in​ days, use a

365​-day

​year.)

Date		Accounts and Explanation	Debit	Credit
Dec.	1

Requirement 2. Journalize the adjusting entry needed on

December

31 to accrue interest revenue. Round to the nearest dollar. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry table. For notes stated in​ days, use a

365​-day

​year.)

Date		Accounts and Explanation	Debit	Credit
Dec.	31

Requirement 3. Journalize the collection of the principal and interest at maturity. Specify the date. Round to the nearest dollar. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry table. For notes stated in​ days, use a

365​-day

​year.)

Date		Accounts and Explanation	Debit	Credit

Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

Journal Entries
No.	Date	Account Titles and Explanation	Debit	Credit
1)	Dec. 1	Notes Receivable	$14,600
		Accounts Receivable		$14,600
		(To record the acceptance of 6% note in exchange of accounts receivable)
No.	Date	Account Titles and Explanation	Debit	Credit
2)	Dec. 31	Interest Receivable	$74
		Interest Revenue ($14,600*6/100*31 days/365 days)		$74
		(To record the interest accrued for one month on the note)
No.	Date	Account Titles and Explanation	Debit	Credit
3)	Mar. 30	Cash ($73 + $219 + $14,600)	$14,888
		Interest Receivable		$74
		Interest Revenue ($14,600*6/100*120-31 days/365 days)		$214
		Notes Receivable		$14,600
		(To record the collection of note along with interest due)