Question

The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:

20Y3
Nov.	21	Received from McKenna Outer Wear Co., on account, a $78,000, 60-day, 8% note dated November 21 in settlement of a past due account.
Dec.	31	Recorded an adjusting entry for accrued interest on the note of November 21.
20Y4
Jan.	20	Received payment of note and interest from McKenna Outer Wear Co.

Journalize the entries to record the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

Answer 1

Date	Account Titles and Explanation	Debit (in $)	Credit (in $)
Nov -21 , 20Y3	Note Receivable	$78,000
	Accounts Receivable		$78,000
	(To record note received)
Dec - 31 , 20Y3	Interest Receivable ($78,000 x 8% x (60 (-) 20)/360)	$693
	To Interest Revenue		$693
	(To record accrued interest )
Jan - 20 , 20Y4	Cash	$79,040
	Note Receivable		$78,000
	Interest Revenue          ($78,000 x 8% x 20 /360)		$347
	Interest Receivable		$693
	(To record payment on Note and Interest)