Question

Exercise 8-10

Sunland 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 $59,400 cash to C. Bohr on a 12-month, 7% note.
Dec. 11		Sold goods to K. R. Pine, Inc., receiving a $1,800, 90-day, 9% note.
Dec. 16		Received a $16,800, 180-day, 11% note to settle an open account from A. Murdock.
Dec. 31		Accrued interest revenue on all notes receivable.

Journalize the transactions for Sunland 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

Answer
Journal Entries
Date	Particulars	Debit	Credit
Nov-01	Notes Receivable A/C	$     59,400
	To Cash A/C		$     59,400
	To record money lend on note at 7% Interest )
Dec-11	Notes Receivable A/C	$       1,800
	To Sales A/C		$       1,800
	( To record goods sold on note)
Dec-16	Notes Receivable   A/C	$     16,800
	To Accounts Receivable A/C		$     16,800
	( To record Note receivable on 16 dec)
Dec-31	Interest Receivable A/C	$          779
	To Interest Revenue A/C		$          779
	59400*7%*2/12+1800*9%*20/360+16800*11%*15/360) =779
	( To record Accrued interest )