Question

Indigo Family Importers sold goods to Tung Decorators for $41,400 on November 1, 2020, accepting Tung’s $41,400, 6-month, 5% note.

Prepare Indigo’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date 11/1/2012/31/205/1/21	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date 11/1/2012/31/205/1/21	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date 11/1/2012/31/205/1/21	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

Answer: preparation of Journal Entries
Date	Accounts title and Explanation	Debit (in $)	Credit (in $)
Nov - 01 , 2020	Notes receivables	$41,400
	Sales Revenue		$41,400
	(To record the sales)
Dec - 31,2020	Interest receivable	$345
	Interest revenue                 [$41,400 x 5% x 2/12]		$345
	(To record the interest )
May -01 ,2021	Cash	$42,435
	Notes receivables		$41,400
	Interest revenue               [$41,400 x 5% x 4/12]		$690
	Interest receivable		$345
	(To record the collection )