Question

Jun. 1−30   Several MBA groups participate in TEAM adventures during June. Great Adventures provides services on account for $19,000 to these groups, with payment due in July.

Jun. 30   Myers Manufacturing fails to pay the amount owed within the specified period and agrees to sign a three-month, 9% note receivable to replace the existing account receivable.-

• Record the acceptance of the note from Myers Manufacturing.

Answer 1

Solution:

Debit Great Adventures account for $19000

Credit Accounts Payable for $19000

As on 30th June :

Debit Note Receivables for the amount due and

Credit Account receivables from Myers Manufacturing for the amount due

(NOTE: The entry for interest revenue will only be made once the interest is earned.)

After three months: On 30th September

Debit Cash for the sum of the amount due and interest earned

Credit Note receivables for the amount due and

Credit Interest Revenue for interest earned

(NOTE: PLEASE GIVE A THUMBS UP IF TOY FIND SOLUTION HELPFUL)