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C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office....

C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2018, to advance Jeff $55,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2019. CSM prepares financial statements on June 30 and December 31. Prepare the journal entry CSM will make when the note is established, accrue interest on June 30 and December 31, and the interest and principal payments on February 28, 2019. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to whole dollar amount.) Record the receipt of the payment for interest for the period ending February 28, 2019, Record the receipt of the payment for the principal on the note’s maturity date

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Answer #1
General Journal Debit Credit
February 28, 2018 Notes Receivable 55000
      Cash 55000
June 30,2018 Interest Receivable 1467 =55000*8%*4/12
      Interest revenue 1467
December 31, 2018 Interest Receivable 2200 =55000*8%*6/12
      Interest revenue 2200
February 28, 2019 Cash 4400
      Interest Receivable 3667 =1467+2200
      Interest revenue 733 =55000*8%*2/12
February 28, 2019 Cash 55000
      Notes Receivable 55000
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