On November 16, Jackson Lawless, Inc. made a cash loan to a customer and received a...

On November 16, Jackson Lawless, Inc. made a cash loan to a customer and

received a $ 240,000 a 60 day 10% note. What is the maturity date and the

maturity value of the note?

Give the necessary adjusting entry on December 31:

Give the journal entry for the maturity date for Jackson Lawless, Inc.

Solutions

Expert Solution

a)Maturity Date : 16November + 60 days = 15 Jan

Maturity value of note = Principal amount + interest accrued

= 240000 + (240000 *10%*6/365)

= 240000+ 3945.21

= 243945.21 (rounded to 243945)

DATE	ACCOUNT TITLE	DEBIT	CREDIT
NOV 16	Note receivable	240000
	cash		240000

December 31	Interest receivable	2959
	Interest revenue		2959
	[Being interest accrued for 45 days :240000.1045/365]

15Jan (next year)	cash	243945
	Interest receivable		2959
	Interest revenue (3945-2959)		986
	Note receivable		240000

ekkarill92 answered 1 year ago

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