Question

Samberg Inc. had the following transactions.

Oct. 1 – Sold $14,000 of merchandise on account, 2/10, n/30 to McCormick Industries.

Nov. 1 – Received a $14,000, 90-day, 11% note from McCormick Industries to settle its $14,000 unpaid balance.

Dec. 31 – Accrued interest on the note. (Round your answer to the nearest whole dollar amount.)

Jan. 31 – Received the interest on the note’s maturity date.

Jan. 31 – Received the principal on the note’s maturity date. (Round your answer to the nearest whole dollar amount.)

Required:

Prepare the required journal entries.

A. Record the entry of sale of merchandise on account to McCormick Industries

B. record the entry of acceptance of promissory in exchange of accounts receivable from McCormick industries

C. Record the entry for interest accrued on promissory note received from McCormick industries

D. Record the entry for interest received, from McCormick industries, on the notes maturity date.

E. Record the entry of payment received of McCormick industries the principal on the notes maturity date.

Answer 1

	Date	Accounting titles & expalantions			Debit	Credit
a.	1-Oct	Account receivable			14,000
		sales revenue				14,000
b.	1-Nov	Note receivable			14,000
		account receivable				14,000
c.	31-Dec	interest receivable			257
		interest income				257
		(14000*11%*60/360)
d.	31-Jan	cash			385
		interest receivable				257
		interest income(11000*11%*30/360)				128
e.	31-Jan	cash			14,000
		note receivable				14,000