Details of notes receivable and related entries
Old Town Co. wholesales bathroom fixtures. During the current fiscal year, Old Town Co. received the following notes:
|
Date
|
Face Amount
|
Term
|
Interest Rate
|
|
1
|
Apr. 10
|
$45,000
|
60 days
|
4%
|
|
2
|
24 Jun
|
18,000
|
30 days
|
6
|
|
3
|
1 Jul
|
36,000
|
120 days
|
6
|
|
4
|
Oct. 31
|
36,000
|
60 days
|
9
|
|
5
|
Nov. 15
|
54,000
|
60 days
|
6
|
|
6
|
Dec. 27
|
40,500
|
30 days
|
4
|
Instructions
1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number.
2. Journalize the entry to record the dishonor of Note (3) on its due date.
3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31.
4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January.