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Financial & Managerial Accounting
Found in: Page 343
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

On August 2, Jun Co. receives a $6,000, 90-day, 12% note from customer Ryan Albany as payment on his $6,000 account. Prepare Jun’s journal entry assuming the note is honored by the customer on October 31 of that same year.

The journal entry of the note on October 31, i.e., its maturity period, will be recorded along with the interest revenue up to its expiry date.

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Step by Step Solution

Journal entry

Date

Particulars

Debit

Credit

August 2

Notes receivables

$6,000

Accounts receivables

$6,000

(To record the issuance of the notes)

October 31

Cash

$6,180

Notes receivables

$6,000

Interest revenue

$180

(To record the cash collected)

Working notes

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