Question

Sloan Systems sells voice mail systems to small businesses. Sloan engaged in the following activities involving notes receivable:

a.	On October 1, 2019, Sloan sold an $8,000 system to Majors Company. Majors gave Sloan a 7-month, 10% note as payment.
b.	On November 1, 2019, Sloan sold a $6,000 system to Hadley Inc. Hadley gave Sloan a 10-month, 12% note as payment.
c.	On May 1, 2020, Majors paid the amount due on its note.
d.	On September 1, 2020, Hadley paid the amount due on its note.

	Required:
	Prepare the necessary journal and adjusting entries for Sloan Systems to record these transactions.

Answer 1

Journal entry ;

Date	account and explanation	debit	credit
Oct 1	Notes receivable-Majors company	8000
	Sales revenue		8000
	(To record sales)
Nov 1	Notes receivable-Hadley Inc	6000
	Sales revenue		6000
	(To record sales)
Dec 31	Interest receivable (8000*10%*3/12+6000*12%*2/12)	320
	Interest revenue		320
	(TO record accured interest)
May 1	Cash (8000*10%*7/12)+800	8467
	Note receivable		8000
	Interest receivable		200
	Interest revenue		267
	(To record amount received)
Sep 1	Cash (6000*12%*10/12)+6000	6600
	Notes receivable		6000
	Interest receivable		120
	Interest revenue		480
	(To record amount received)