Question

On April 1, 2018, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $580,000 to its supplier using a 12-month, 10% note.

Required:

1. The loan of $580,000 and acceptance of the note receivable on April 1, 2018.
2. The adjustment for accrued interest on December 31, 2018.
3. Cash collection of the note and interest on April 1, 2019.

Record the above transactions for Shoemaker Corporation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

Journal entry worksheet

Record the note.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
April 01, 2018

Answer 1

Apr-1-18	Notes receivable	580000
	Cash		580000
Dec-31-18	Interest receivable	43500		=580000*10%/12*9
	Interest revenue		43500
Apr-1-19	Cash	638000
	Notes receivable		580000
	Interest receivable		43500
	Interest revenue		14500	=580000*10%/12*3