Notes Receivable and Notes Receivable Discounted
Response to the following problem:
The following notes receivable transactions occurred for the Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.)
Oct. 9 Received a $5.000, 12%, 60-day note from K. Weedon, a customer.
Oct. 12 Received a $6,000, 10%, 90-day note from St. Black, a customer.
On 15 Discounted the Weedon note with recourse at the hank at 14%
Nov. 11 Discounted the Black note with recourse at the hank at 15%.
Nov. 16 Received an $8,000, 12%, 60-day note from B. Butcher, a customer.
Nov. 20 Received a $6,000, 11%, 120-day note from D. Goldman, a customer.
Dec. 1 Received a $9,000, 13%, 60-day note from S. Lambert, a customer.
Dec. 8 Received notice that the Weedon note was paid at maturity.
Dec. 10 Discounted the Goldman note with recourse at the bank at 13%.
Required:
1. Prepare journal entries to record the preceding note transactions and the necessary adjusting entries on December 31. (Assume that Harris does not normally discount its notes.)
2. Show how Harris Company's notes receivable would be disclosed on the December 31 balance sheet. (Assume these are the only note transactions encountered by Harris during the year.)