Response to the following problem:
A $120,000 account receivable owing from Baron Cabinets Ltd. to Glimmer Enterprises was converted into a 12%, 12-month note receivable on August 1, 2015. Principal of $10,000 per month plus accrued interest on the outstanding balance was to be paid on the note on the last day of each month.
Required:
1. Prepare the entry needed to record the note receivable in Glimmer's accounting records on August 1.
2. Prepare the entry needed to record accrued interest on the note receivable in Glimmer's accounting records at December 31, 2015.
3. Record the cash received from the note in Glimmer's accounting records on February 28, 2016.