FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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**Scenario: Loan Default Journal Entry**

McKlien Corporation holds a six-month, $10,000, 6% note receivable from L. Noel, signed on June 1, 2024. The borrower, Noel, defaults on the loan on December 1, 2024. 

**Task: Journalize the Loan Default**

Record McKlien's journal entry for the default. Calculate interest based on months, not days, and list debits before credits. Include an explanation on the last line of the journal entry table.

---

**Journal Entry Table**

| Date       | Accounts and Explanation           | Debit     | Credit   |
|------------|------------------------------------|-----------|----------|
| 2024 <br> Dec. 1 | [Accounts and Explanation Fields] | [Debit Fields] | [Credit Fields] |
|            | [Explanation Field]               |           |          |

**Instructions:**

1. Calculate the interest for the six months.
2. Identify the appropriate debit and credit accounts affected by the default.
3. Enter the explanation related to the default for proper documentation.

Use this structured journal entry table format for accurate financial record-keeping and analysis.
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Transcribed Image Text:**Scenario: Loan Default Journal Entry** McKlien Corporation holds a six-month, $10,000, 6% note receivable from L. Noel, signed on June 1, 2024. The borrower, Noel, defaults on the loan on December 1, 2024. **Task: Journalize the Loan Default** Record McKlien's journal entry for the default. Calculate interest based on months, not days, and list debits before credits. Include an explanation on the last line of the journal entry table. --- **Journal Entry Table** | Date | Accounts and Explanation | Debit | Credit | |------------|------------------------------------|-----------|----------| | 2024 <br> Dec. 1 | [Accounts and Explanation Fields] | [Debit Fields] | [Credit Fields] | | | [Explanation Field] | | | **Instructions:** 1. Calculate the interest for the six months. 2. Identify the appropriate debit and credit accounts affected by the default. 3. Enter the explanation related to the default for proper documentation. Use this structured journal entry table format for accurate financial record-keeping and analysis.
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