Question

On June 1, 2018, Jensen Company acquired an 7.2%, ten-month note receivable from a customer in settlement of an existing account receivable of $210,000. Interest and principal are due at maturity.

Answer 1

Journal entry:
			(Amount $)
		Debit	Credit
June 1st 2018	Notes receivable a/c Dr	210,000.00
	To accounts receivable a/c		210,000.00
	(Being a 10 month note received 7.2% from a customer in settlement of a accounts receivable accounted)
March 31st 2019	Accured interest receivable a/c Dr	12,250.00
	To Interest received a/c		12,250.00
	(Being 10 months interest due to be received on the note of $210,[email protected]% is accounted=210000*7%/12*10=12,250)
April 1st 2019	Cash A/c Dr	222,250.00
	To Notes receivable a/c		210,000.00
	To Accured interest receivable a/c		12,250.00
	(Being notes receivable and accured interest of 10 months received)