Question

Following are transactions of The Barnett Company:

2020
Dec.	16	Accepted a $22,900, 60-day, 5% note dated this day in granting Carmel Karuthers a time extension on her past-due account.
Dec.	31	Made an adjusting entry to record the accrued interest on the Karuthers note.
Dec.	31	Closed the Interest income account.

2021
Feb.	14	Received Karuthers’ payment for the principal and interest on the note dated December 16.
Mar.	2	Accepted an $8,800, 4%, 90-day note dated this day in granting a time extension on the past-due account of ATW Company.
Mar.	17	Accepted a $4,000, 30-day, 4.5% note dated this day in granting Leroy Johnson a time extension on his past-due account.
May	31	Received ATW’s payment for the principal and interest on the note dated March 2.

general entries for all transcations

Answer 1

Journal Entries:

Date	Account title and explanation	Debit	Credit
Dec 16,2020	Notes receivable-Carmel	$22,900
	Accounts receivable-Carmel		$22,900
	[To record acceptance of notes in exchange of accounts receivable]
Dec 31,2020	Interest receivable	$47
	Interest revenue [22,900 x 5% x (15/365)]		$47
	[To record accrued interest revenue]
Dec 31,2020	Interest revenue	$47
	Income summary		$47
	[To close interest revenue account]
Feb 14,2021	Cash	$23,088
	Interest receivable		$47
	Interest revenue [22,900 x 5% x (45/365)]		$141
	Notes receivable-Carmel		$22,900
	[To record cash received for notes at maturity]
Mar 2,2021	Notes receivable-ATW	$8,800
	Accounts receivable-ATW		$8,800
	[To record acceptence of notes in exchange of accounts receivable]
Mar 17,2021	Notes receivable-Leroy	$4,000
	Accounts receivable-Leroy		$4,000
	[To record acceptance of notes in exchange of accounts receivable]
Mar 31,2021	Cash	$8,828
	Interest revenue [8800 x 4% x (29/365)]		$28
	Notes receivable-ATW		$8,800
	[To record cash received for principal and interest of ATW notes]