Question

Entries for Receipt and Dishonor of Notes Receivable

Journalize the following transactions in the accounts of Missouri Gaming Co., which operates a riverboat casino. Assume 360 days in a year. If an amount box does not require an entry, leave it blank. Round final answers to the nearest cent when necessary.

Mar. 29.	Received a $72,000, 60-day, 10% note dated March 29 from Karie Platt on account.
Apr. 30.	Received a $16,500, 60-day, 6% note dated April 30 from Jon Kelly on account.
May 28.	The note dated March 29 from Karie Platt is dishonored, and the customer's account is charged for the note, including interest.
June 29.	The note dated April 30 from Jon Kelly is dishonored, and the customer's account is charged for the note, including interest.
Aug. 26.	Cash is received for the amount due on the dishonored note dated March 29 plus interest for 90 days at 6% on the total amount debited to Karie Platt on May 28.
Oct. 22.	Wrote off against the allowance account the amount charged to Jon Kelly on June 29 for the dishonored note dated April 30.

Mar. 29	Notes Receivable
	Accounts Receivable-Karie Platt
Apr. 30	Notes Receivable
	Accounts Receivable-Jon Kelly
May 28	Accounts Receivable-Karie Platt
	Notes Receivable
	Interest Revenue
June 29	Accounts Receivable-Jon Kelly
	Notes Receivable
	Interest Revenue
Aug. 26	Cash
	Accounts Receivable-Karie Platt
	Interest Revenue
Oct. 22	Allowance for Doubtful Accounts
	Accounts Receivable-Jon Kelly

Answer 1

Journal entries :

Date	account and explanation	debit	credit
Mar 29	Notes receivable	72000
	Accounts Receivable-Karie Platt		72000
Apr 30	Notes receivable	16500
	Accounts Receivable-Jon Kelly		16500
May 28	Accounts Receivable-Karie Platt	73200
	Notes receivable		72000
	Interest revenue (72000*10%*60/360)		1200
June 29	Accounts Receivable-Jon Kelly	16665
	Notes receivable		16500
	Interest revenue (16500*6%*60/360)		165
Aug 26	Cash	74298
	Accounts Receivable-Karie Platt		73200
	Interest revenue (73200*6%*90/360)		1098
Oct 22	Allowance for Doubtful Accounts	16665
	Accounts Receivable-Jon Kelly		16665