Question

Notes Receivable Entries

The following data relate to notes receivable and interest for Owens Co., a financial services company. (All notes are dated as of the day they are received.) Assume 360 days in a year.

Mar. 8.		Received a $96,000, 8%, 60-day note on account.
31.		Received a $21,600, 9%, 90-day note on account.
May 7.		Received $97,280 on note of March 8.
16.		Received a $58,800, 12%, 90-day note on account.
June 11.		Received a $30,000, 6%, 30-day note on account.
29.		Received $22,086 on note of March 31.
July 26.		Received $30,150 on note of June 11.
Aug. 4.		Received a $3,600, 11%, 30-day note on account.
14.		Received $60,564 on note of May 16.
Dec. 2.		Received $3,633 on note of August 4.

Required:

Journalize the entries to record the transactions. For a compound transactions, if an amount box does not require an entry, leave it blank.

Mar. 8
Mar. 31
May 7
May 16
June 11
June 29
July 26
Aug. 4
Aug. 14
Dec. 2

Answer 1

Journal (Amounts in $)

Date	Accounts title and explanation	Debit	Credit
Mar 8	Notes Receivable	96,000
	Accounts Receivable		96,000
	(Note received on account)
Mar 31	Notes Receivable	21,600
	Accounts Receivable		21,600
	(Note received on account)
May 7	Cash	97,280
	Notes Receivable		96,000
	Interest Revenue (96,000*8%*60/360)		1,280
	(To record cash received on the note)
May 16	Notes Receivable	58,800
	Accounts Receivable		58,800
	(Note received on account)
June 11	Notes Receivable	30,000
	Accounts Receivable		30,000
	(Note received on account)
June 29	Cash	22,086
	Notes Receivable		21,600
	Interest Revenue (21,600*9%*90/360)		486
	(To record cash received on the note)
July 26	Cash	30,150
	Notes Receivable		30,000
	Interest Revenue (30,000*6%*30/360)		150
	(To record cash received on the note)
Aug 4	Notes Receivable	3,600
	Accounts Receivable		3,600
	(Note received on account)
Aug 14	Cash	60,564
	Notes Receivable		58,800
	Interest Revenue (58,800*12%*90/360)		1,764
Dec 2	Cash	3,633
	Notes Receivable		3,600
	Interest Revenue (3,600*12%*90/360)		33