On September $1,2023,$ Metlock, Inc, sold goods to Sarasota Corp., a new customer. Before shipping the goods, Metlock's credit and collections department conducted a credit check and determined that Sarasota is a high credit$-$risk customer. As a result, Metlock did not provide Sarasota with open credit by recording the sale as an account receivable: Instead, Metlock required Sarasota to provide a non$-$interest$-$bearing promissory note for $$46,200$ face value, to be repaid in one year. Sarasota has a credit rating that requires it to pay $12\%$ interest on borrowed funds. Metlock pays $10\%$ interest on a loan recently obtained from its local bank. Metlock has a December $31$ year end and follows IFRS.

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

Lab $5$: Chapter $7$

$($a$)$

Your answer is partially correct.

Prepare the entries required on Metlock's books to record the sale, annual adjusting entry, and collection of the note's full face value. $($For calculation purposes, use $5$ decimal places as displayed in the factor table provided. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter Of or the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.$)$

Date

September $1,2023$

Account Titles and Explanation

Notes Receivable

Debit

Credi

Question $3$ of $6$

$\frac{0\mathrm{.}11}{1}$

Interest Income $q,$

September $1\mathrm{.}2023$

$$

$$

Interest Receivable

$($To record interest income$)$

September $1\mathrm{.}2023$

$$

$$

$$

$$

$($To record collection of the note receivable$)$