Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of
Question:
Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2020. The company does not make entries to accrue interest except at December 31.
Nov. 1 Loaned $30,000 cash to Manny Lopez on a 12 month, 10% note.
Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $6,750, 90-day, 8% note.
16 Received a $4,000, 180 day, 9% note in exchange for Joe Fernetti’s outstanding accounts receivable.
31 Accrued interest revenue on all notes receivable.
Instructions
a. Journalize the transactions for Elburn Supply Co. (Ignore entries for cost of goods sold.)
b. Record the collection of the Lopez note at its maturity in 2021.
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Step by Step Answer:
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso