Question

# Entries for Notes Receivable, Including Year-End Entries The following selected transactions were completed by Interlocking Devices...

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 \$96,000, 60-day, 9% 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.

 20Y7, Dec. 7 Dec. 31 Dec. 31 20Y8, Feb. 5

 Date Account Titles and Explanation Debit Credit 2017 Dec .7 Notes receivable - Unitarian Clothing and Bags Co 96,000 Sales 96,000 ( Sold goods in exchange for a 60-day, 9% note) Dec 31 Interest receivable 576 Interest revenue 576 (Interest accrued) Dec 31 Interest revenue 576 Income summary 576 (Close Interest revenue account) 2018 Feb. 5 Cash 97,440 Interest revenue 864 Interest receivable 576 Notes receivable - Unitarian Clothing and Bags Co 96,000 (Received Payment of Note and Interest)

Calculation of interest :

==> At Dec 31 (For 24 days) = \$96,000 X 9% X 24 / 360 = \$576

==> At Feb 5 (For 36 days) = \$96,000 X 9% X 36 / 360 = \$864

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