Question

Samberg Inc. had the following transactions.

1. Oct. 1 – Sold $20,500 of merchandise on account, 1/10, n/30 to McCormick Industries.

2. Nov. 1 – Received a $20,500, 90-day, 11% note from McCormick Industries to settle its $20,500 unpaid balance.

3. Dec. 31 – Accrued interest on the note. (Round your answer to the nearest whole dollar amount.)

4. Jan. 31 – Received the interest on the note’s maturity date.

5. Jan. 31 – Received the principal on the note’s maturity date. (Round your answer to the nearest whole dollar amount.)

Required:

Prepare the required journal entries.

Answer 1

Solution:

Journal Entries - Samberg Inc.
Date	Particulars	Debit	Credit
1-Oct	Accounts receivables Dr	$20,500.00
	To Sales revenue		$20,500.00
	(To record sale on account)
1-Nov	Note receivables Dr	$20,500.00
	To Accounts receivables		$20,500.00
	(To record receipt of note)
31-Dec	Interest receivables Dr ($20,500*11%*60/365)	$371.00
	To Interest revenue		$371.00
	(To record interest revenu)
31-Jan	Cash Dr	$556.00
	To Interest receivables		$371.00
	To Interest revenue ($20,500*11%*30/365)		$185.00
	(To record collection of interest at maturity)
31-Jan	Cash Dr	$20,500.00
	To Note receivables		$20,500.00
	(To record collection of principal amount at maturity)