Question

On December 31, 2020, Tobita Company had the following balances reported on its balance sheet: Notes...

On December 31, 2020, Tobita Company had the following balances reported on its balance sheet:

Notes Receivable $13,800
Interest Receivable $75.00


The following information is available for the notes receivable reported on December 31, 2020.

Customer Note
Principal
Interest
Rate
Issue
Date
Term Interest
Accrued
1 E. Tessier $3,600 5.00% Nov. 1, 2020 3 months $30.00
2 R. Wolde 3,600 4.00% Nov. 30, 2020 5 months 12.00
3 D. Deng 6,600 6.00% Dec. 1, 2020 1 year 33.00
Total $13,800 Total $75.00


All notes require that the interest be paid on the maturity date of the note. All amounts owing on the notes were paid on time. Tobita prepares annual adjusting entries on December 31, the company’s year end.

Additional transactions of 2021:

Mar. 1 Received a $12,600, twelve-month, 5.00% note from T. Lalonde in settlement of an accounts receivable. Interest is due at maturity.
Oct. 30 Received a $6,000, three-month, 4.00% note from J. Han in settlement of an accounts receivable. Interest is due at maturity.
Dec. 1 Provided a $10,000 loan to Morgan Industriesin exchange for a two-year, 6.00% note with interest due at maturity. Interest on the note is payable each year on November 30.

Prepare all required journal entries related to the notes receivables during 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Reco

Homework Answers

Answer #1
Date Account title and explanation Debit Credit
Mar 1, 3021 Cash $3,645
Interest revenue [3600 x 5% x 1/12] $15
Interest receivable $30
Notes receivable $3,600
[To record collection at maturity for the notes]
Oct 30, 2021 Cash $3,660
Interest revenue [3600 x 4% x 4/12] $48
Interest receivable $12
Notes receivable $3,600
[To record collection at maturity for the notes]
Dec 1, 2021 Cash $6,996
Interest revenue [6600 x 6% x 11/12] $363
Interest receivable $33
Notes receivable $6,600
[To record collection at maturity for the notes]
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