1. Prepare the journal entries that Parker's Grocery would record for the above transactions
1.)Record the receipt of a note on January 1 for a $43,000 loan to an employee.
2.) Record the interest accrued on the note as of June 30.
3.) Record the receipt of the interest on the note
Solution
Solution-
DR Interest Receivable.....................................322.5 (43,000 x 0.09 x 1/2)
CR Interest Revenue..............................................................322.5
Solution-
DR Cash.......................................645
CR Interest Receivable............................................322.5
CR Interest Revenue...............................................322.5
Dec. 31 Received interest and principal on the note. (No interest has been recorded since June
30.)
Solution-
DR Cash......................................43,000
CR Notes Receivable....................................43,000
Jan. 1 Loaned $43,000 to a cashier of the company and received back a one-year, 9 percent note.