Question

Blossom Company has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. (Omit cost of goods sold entries.)

Nov. 1		Loaned $66,000 cash to C. Bohr on a 12-month, 5% note.
Dec. 11		Sold goods to K. R. Pine, Inc., receiving a $5,400, 90-day, 7% note.
Dec. 16		Received a $7,200, 180-day, 9% note to settle an open account from A. Murdock.
Dec. 31		Accrued interest revenue on all notes receivable.

Journalize the transactions for Blossom Company (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Date	General Journal	Debit	Credit
1-Nov	Notes receivable	$         66,000.00
	Cash		$         66,000.00
	(loan given)
11-Dec	Notes receivable	$           5,400.00
	Sales revenue		$           5,400.00
	(Sales revenue recorded)
16-Dec	Notes receivable	$           7,200.00
	Accounts Receivable		$           7,200.00
	(To record receipt of notes receivable )
31-Dec	Interest Receivable	$               322.34
	Interest revenue		$               322.34
	(Interest revenue earned)

Interest chart
Note Interest rate and Description	Value of note	Total interest	Time period of note	Period passed	Interest earned
5% note of 12 months	$ 66,000.00	$    3,300.00	12 months	1 month	$               275.00
7% note of 90 days	$     5,400.00	$          93.21	90 days	20 days	$                 20.71
9% note of 180 days	$     7,200.00	$        319.56	180 days	15 days	$                 26.63
Total interest earned till dec 31					$               322.34