Question

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

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)