Question

Entries for Notes Receivable, Including Year-End Entries

The following selected transactions were completed by Interlocking Devices Co., a supplier of zippers for clothing:

20Y7
Dec. 7.	Received from Unitarian Clothing and Bags Co., on account, a $72,000, 60-day, 10% note dated December 7.
Dec. 31.	Recorded an adjusting entry for accrued interest on the note of December 7.
Dec. 31.	Recorded the closing entry for interest revenue.
20Y8
Feb. 5.	Received payment of note and interest from Unitarian Clothing & Bags Co.

Journalize the entries to record the transactions. Assume 360 days in a year. If an amount box does not require an entry, leave it blank. Assume February has 28 days in 2018

If required, round the interest to the nearest cent.

Answer 1

	Date	Description				Debit	Credit
	7/10/2017	Note receivable				72,000
		account receivable-Unitarian					72,000
	12/31/2017	interest receivable				288
		interest revenue					288
		(72000*6%*24/360)
	12/31/2017	interest revenue				288
		income summary					288
	2/5/2018	cash				72,720
		note receivable					72,000
		interest revenue					432
		interest receivable					288