Question

The information is the same as the previous question: On April 1, 2012, Green Company finished...

The information is the same as the previous question:

On April 1, 2012, Green Company finished consultation services and accepted in exchange a note receivable with a face value of $600,000, a due date of April 1, 2015, and a stated rate of 6%, with interest receivable at the end of April 1. The note of this type of risk is considered to have an appropriate market rate of interest of 10%.

(1) Determine the total sales revenue Green Company recognized on April 1, 2012.

(2) Provide all journal entires in 2012 and 2013.

will you please explain answers part 1, and 2 take you

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Homework Answers

Answer #1

1) The total sales revenue Green Company recognized on April 1, 2012. = $600,000

2) Journal entires in 2012 and 2013:

ASSUMPTIONS:

  • Financial year - 1st April To 31st March
  • Interest of 6% is Per annum
Date Particulars Debit Credit

2012

April 1

Note receivable A/c DR.

   To Revenue

 600,000 600,000

2013

Mar 31

Interest receivables DR.

Interest Revenue

 36000 36000
April 1

Cash DR.

To Interest receivables

 36000 36000

2014

Mar 31

Interest receivables DR.

Interest Revenue

 36000 36000
April 1

Cash DR.

To Interest receivables

 36000 36000
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