In an effort to raise some cash for operating activities, Novak Corporation approached Flounder Ltd. and...

 

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In an effort to raise some cash for operating activities, Novak Corporation approached Flounder Ltd. and asked to borrow $127,000 (the Presidents of Novak and Flounder were cousins). Flounder agreed to loan $127,000 to Novak for three months at 6% interest. On August 1, Novak signed a promissory note for the amount, promising to repay the funds plus interest on November 1. Prepare all the journal entries on the books of Flounder to record the note receivable, assuming that Flounder's fiscal year-end is September 30 and repayment of the note receivable plus interest occurs on November 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) In an effort to raise some cash for operating activities, Novak Corporation approached Flounder Ltd. and asked to borrow $127,000 (the Presidents of Novak and Flounder were cousins). Flounder agreed to loan $127,000 to Novak for three months at 6% interest. On August 1, Novak signed a promissory note for the amount, promising to repay the funds plus interest on November 1. Prepare all the journal entries on the books of Flounder to record the note receivable, assuming that Flounder's fiscal year-end is September 30 and repayment of the note receivable plus interest occurs on November 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Answer rating: 100% (QA)

Note Value 127000 Interest rate 6 Interest till Sept 30 127000 6 212 1270 Intere... View the full answer