2. On January 1, 2024, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note promising payment of $120,000 in five years. The applicable effective interest rate is 7%. Prepare the necessary entries on January 1, 2024, and December 31, 2024 related to this note. General Journal 1/1 Note Receivable Discount on Note Receivable Sales Revenue Debit Credit 120,000 34,441 85,559 General Journal Debit Credit 12/31 Discount on Note Receivable 5,989 Interest Revenue 5,989

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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2. On January 1, 2024, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note
promising payment of $120,000 in five years. The applicable effective interest rate is 7%.
Prepare the necessary entries on January 1, 2024, and December 31, 2024 related to this note.
General Journal
1/1
Note Receivable
Discount on Note Receivable
Sales Revenue
Debit
Credit
120,000
34,441
85,559
General Journal
Debit
Credit
12/31
Discount on Note Receivable
5,989
Interest Revenue
5,989
Transcribed Image Text:2. On January 1, 2024, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note promising payment of $120,000 in five years. The applicable effective interest rate is 7%. Prepare the necessary entries on January 1, 2024, and December 31, 2024 related to this note. General Journal 1/1 Note Receivable Discount on Note Receivable Sales Revenue Debit Credit 120,000 34,441 85,559 General Journal Debit Credit 12/31 Discount on Note Receivable 5,989 Interest Revenue 5,989
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