Question

Following are transactions for Vitalo Company.

Nov.		1		Accepted a $15,000, 180-day, 8% note from Kelly White in granting a time extension on her past-due account receivable.
Dec.		31		Adjusted the year-end accounts for the accrued interest earned on the White note.
Apr.		30		White honored her note when presented for payment.

Complete the table to calculate the interest amounts at December 31^st and April 30^th and use those calculated values to prepare your journal entries. (Do not round intermediate calculations. Use 360 days a year.)

Answer 1

1
	Total through maturity	November 1 through December 31	January 1 through April 30
Principal	15000	15000	15000
Rate(%)	8%	8%	8%
Time	180/360	60/360	120/360
Total interest	600	200	400
2
	General Journal	Debit	Credit
Nov. 1	Notes receivable—K. White	15000
	Accounts receivable—K. White		15000
Dec 31	Interest receivable	200
	Interest revenue		200
Apr 30	Cash	15600
	Interest receivable		200
	Interest revenue		400
	Notes receivable—K. White		15000