Question

Sweet Family Importers sold goods to Tung Decorators for $45,000 on November 1, 2017, accepting Tung’s...

Sweet Family Importers sold goods to Tung Decorators for $45,000 on November 1, 2017, accepting Tung’s $45,000, 6-month, 5% note. Prepare Sweet’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Homework Answers

Answer #1

Journal entry:

Date

Account Titles and Explanation

Debit

credit

11/1/17

Notes receivable

45,000

    Sales revenue

45,000

(Entry to record sales revenue)

12/31/17

Interest receivable (45,000*5%*2/12)

375

    Interest revenue

375

(Entry to record Interest revenue)

5/1/18

Cash

46,125

    Notes receivable

45,000

    Interest receivable

375

    Interest revenue (45,000*5%*4/12)

750

(Entry to record collection of cash)

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