Question

Gaber Co. lends Ameer Co. $40,000 on June 1, accepting a four-month, 6% interest note.

If Gaber Wolder presents the note to Ameer Co. on Oct. 1, the maturity date, and receive the amount.

Prepare the journal entries

Date		Debit	Credit

Question 4:

On June 1, Naser Co. lent Yazan Co. $60,000, and accept a two-month, 5% interest note.

On Aug. 1, the maturity date, Naser Wolder presented the note to Yazan Co. but Yazan refused to pay the amount.

Prepare the journal entries

Date		Debit	Credit

Answer 1

Solution:
	Journal entries
Date	Accounts titles and explanation	Debit	Credit
June, 1	Note receivable	$40,000
	Accounts receivable		$40,000
	(Being note accepted by Gaber co.)
October, 1	Cash	$40,800
	Note receivable		$40,000
	Interest Revenue($40,000*6%*4/12)		$800
	(Being amount received against the note)
	Journal entries
Date	Accounts titles and explanation	Debit	Credit
June, 1	Note receivable	$60,000
	Accounts receivable		$60,000
	(Being note accepted by Naser co.)
August, 1	Allowance for Bad debt	$60,000
	Note receivable		$60,000
	(Being note uncollectable from Yazan Co.)
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