Question

Exercise 8-14 Novak Company had the following select transactions. Apr. 1, 2019 Accepted Goodwin Company’s 12-month,...

Exercise 8-14

Novak Company had the following select transactions.
Apr. 1, 2019 Accepted Goodwin Company’s 12-month, 16% note in settlement of a $98,600 account receivable.
July 1, 2019 Loaned $100,600 cash to Thomas Slocombe on a 9-month, 14% note.
Dec. 31, 2019 Accrued interest on all notes receivable.
Apr. 1, 2020 Received principal plus interest on the Goodwin note.
Apr. 1, 2020 Thomas Slocombe dishonored its note; Novak expects it will eventually collect.


Prepare journal entries to record the transactions. Novak prepares adjusting entries once a year on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.)

Homework Answers

Answer #1
Date account titles & Explanations Debit Credit
4/1/2019 Note receivable 98,600
Account receivable-Goodwin 98,600
7/1/2019 Note receivable- 100,600
Cash 100,600
12/31/2019 interest receivable 18874
interest income 18874
98600*16%*9/12
100600*14%*6/12
4/1/2020 cash 114376
interest receivable 11832
interest income 3944
note receivable 98600
4/1/2020 Account receivable-Thomas 111163
interest receivable 7042
interest income 3521
note receivable 100600
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