Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration


Horngren'S Financial And Managerial Accounting
Found in: Page 473

Short Answer

Professional Steam Cleaning performs services on account. When a customer account becomes four months old, Professional converts the account to a note receivable. During 2018, the company completed the following transactions:



Performed service on account for Parkview Club, $18,000.

Sep. 1

Received an $18,000, 60-day, 12% note from Parkview Club in satisfaction of its past-due account receivable.

Oct. 31

Collected the Parkview Club note at maturity

Record the transactions in Professional’s journal. Round to the nearest dollar.

Journal entries are recorded in step 2.

See the step by step solution

Step by Step Solution

Step1: Calculation of interest amount

Interest amount is calculated as follows:

Step2: Journal entries


Account and explanation




Accounts Receivable - Parkview club

$ 18,000

Service Revenue

$ 18,000

(To record services revenue earned)

Sept 1

Notes Receivable - Parkview club

$ 18,000

Accounts Receivable - Parkview club

$ 18,000

(To record note issued against accounts receivable)




Notes Receivable- Parkview club


Interest Revenue


(To record collection of note with interest)

Most popular questions for Business-studies Textbooks


Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.