Question

On May 25, Al Mujaaz Company made a credit sale of OMR 320,000 to Al Zahir Company
and received a note for 120 days with 7.75% interest from him in settlement of account
receivables. Al Mujaaz Company closes their accounts every year on July 31 st and calculated
accrued interest on the note of May 25 th. Al Mujaaz Company received Notification from Al Zahir
that he was unable to honour his note on the due date it is expected that Al Zahir will pay at a
later date but On 1 st October Al Zahir has paid full amount on note. On May 25 another note for
90 days 12.5% interest has been received for OMR 142,000 from Al Zubair Company has been
honoured on the due date.
Prepare Necessary Journal entries for the above Transactions.

Note: provide the answer in text format

Answer 1

	journal entries
DATE		DEBIT	CREDIT
Mar-25	Al zaheer company	320000
	sales		320000
	notes	320000
	Al zaheer company		320000
Jul-31	Accrued interest	4620.27
	Interest		4620.27
	(320000*7.75%*68/365)
on the due date	Al Zaheer company	328153.42
	notes		320000
	accrued interest		4620.27
	interest		3533.15
	(320000*7.75%*52/365)
Oct-01	cash	328153.42
	Al zaheer company		328143.42
May-25	notes	142000
	Al Zubair company		142000
at the end of 3 months	cash	18576.71
	notes		142000
	interest		4376.71
	(142000*12.5%*90/365)