Question

What 2 accounts would you use per date?

Nov. 1		Loaned $27,600 cash to Manny Lopez on a 12 month, 10% note.
Dec. 11		Sold goods to Ralph Kremer, Inc., receiving a $81,000, 90-day, 8% note. (Omit cost of goods sold entries.)
16		Received a $82,080, 180 day, 10% note in exchange for Joe Fernetti’s outstanding accounts receivable.
31		Accrued interest revenue on all notes receivable.

Answer 1

Nov 1, notes receivable account...............Debit $27,600

To Cash account.............................Credit $27,600

Dec 11, 8%, Notes Receivable account.........Debit $81,000

To Sales Revenue account...............Credit $81,000

Dec 16, 10% Notes receivable account..........Debit $82,080

To Accounts Receivable account.Credit $82,000

Dec 31, Interest receivable account..........Debit $975

To Interest revenue account..........Credit $975

Working Notes: Computation of Accrued Interest.

Assumed year has 365 days

$27,600 * 10% * 2/12 = $460

$81,000 * 8% * 10 days/365 = $178

$82,080 *10%*15 / 365 = $337

Total Accrued interest = $975