Note receivable:
Note receivable refers to a written promise for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to lender or creditor. Notes receivable is an asset of a business.
Interest on note:
Interest on note is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender.
Dishonored note:
Note receivable refers to a written promise by the debtor for the amounts to be received within a stipulated period of time. Note is otherwise known as promissory note. If this promissory note is not settled by the debtor at its maturity date, then it became is known as dishonored note.
To journalize: The entries, to record the transactions.
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Financial & Managerial Accounting
- Entries for receipt and dishonor of notes receivable Journalize the following transactions in the accounts of Missouri Gaming Co., which operates a riverboat casino. Assume 360 days in a year. If an amount box does not require an entry, leave it blank. When required, round your final answers to the two decimal places. Date Transaction March 29 Received a $50,400, 60-day, 8% note dated March 29 from Karie Platt on account. April 30. Received a $35,400, 60-day, 10% note dated April 30 from Jon Kelly on account. May 28. The note dated March 29 from Karie Platt is dishonored, and the customer's account is charged for the note, including interest. June 29. The note dated April 30 from Jon Kelly is dishonored, and the customer's account is charged for the note, including interest. August 26. Cash is received for the amount due on the dishonored note dated March 29 plus interest for 90 days at 12% on the total amount debited to Karie Platt on May 28. October 22. Wrote off…arrow_forwardOn July 9, Mifflin Company receives an $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on July 9 to record receipt of the note?  Multiple Choice  Debit Notes Receivable $8,670; credit Sales $8,670.  Debit Notes Receivable $8,725; credit Interest Revenue $225; credit Accounts Receivable $8,500.  Debit Accounts Receivable $8,500; credit Sales $8,500.  Debit Notes Receivable $8,500; credit Accounts Receivable $8,500.  Debit Notes Receivable $8,500; credit Sales $8,500.arrow_forwardThe following notes receivable transactions occurred for Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.) Oct. 9 Received a $5,000, 12%, 60-day note from K. Weedon, a customer, for merchandise originally purchased on account.  12 Received a $6,000, 10%, 90-day note from M. Black, a customer, for merchandise originally purchased on account.  15 Sold the Weedon note with recourse at the bank at 14%. The fair value of the recourse liability is estimated to be $1,230. Nov. 11 Sold the Black note with recourse at the bank at 15%. The fair value of the recourse liability is estimated to be $850.  16 Received an $8,000, 12%, 60-day note from B. Butcher, a customer, for merchandise originally purchased on account.  20 Received a $6,000, 11%, 120-day note from D. Goldman, a customer, for merchandise originally purchased on account. Dec. 1 Received a $9,000, 13%, 60-day note from S. Lambert, a…arrow_forward
- Entries for Receipt and Dishonor of Notes Receivable Journalize the following transactions in the accounts of Safari Games Co., which operates a riverboat casino. Assume 360 days in a year. For a compound transaction, if an amount box does not require an entry, leave it blank. Round final answers to the nearest cent when necessary. Apr. 18. Received a $43,200, 60-day, 7% note dated April 18 from Glenn Cross on account. 30. Received a $14,400, 60-day, 10% note dated April 30 from Rhoni Melville on account. May 18. The note dated April 18 from Glenn Cross is dishonored, and the customer’s account is charged for the note, including interest. June 29. The note dated April 30 from Rhoni Melville is dishonored, and the customer’s account is charged for the note, including interest. Aug. 16. Cash is received for the amount due on the dishonored note dated April 18 plus interest for 90 days at 6% on the total amount debited to Glenn Cross on May 18. Oct. 22. Wrote off against the…arrow_forwardntries for Receipt and Dishonor of Notes Receivable Journalize the following transactions in the accounts of Safari Games Co., which operates a riverboat casino. Assume 360 days in a year. For a compound transaction, if an amount box does not require an entry, leave it blank. Round final answers to the nearest cent when necessary.Apr. 18. Received a $14,400, 60-day, 8% note dated April 18 from Glenn Cross on account.30. Received a $30,300, 60-day, 6% note dated April 30 from Rhoni Melville on account.May 18. The note dated April 18 from Glenn Cross is dishonored, and the customer’s account is charged for the note, including interest.June 29. The note dated April 30 from Rhoni Melville is dishonored, and the customer’s account is charged for the note, including interest.Aug. 16. Cash is received for the amount due on the dishonored note dated April 18 plus interest for 90 days at 12% on the total amount debited to Glenn Cross on May 18.Oct. 22. Wrote off against the allowance account…arrow_forwardRecord the following transactions in general journal form for Koonce Company. Jul 1 Received a $5,000 3-month, 5%, note, dated July 1, from Ruth Jordan in payment of her open account. Sep 30 Received notification from Ruth Jordan that she was unable to honour her note at this time. It is expected that Jordan will pay at a later date. Nov 15 Received full payment from Ruth Jordan for note receivable previously dishonoured. No additional financing charges were charged.arrow_forward
- A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?arrow_forwardOn June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.arrow_forwardJournal Entries for Accounts and Notes ReceivableLancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $18,000, 60 day, eight percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received a $21,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $17,000, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method  of providing for credit losses. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off  during this first year have created a debit balance in the Allowance for Doubtful Accounts of  $25,600. An analysis of aged receivables indicates that the desired balance of the  allowance account should be $22,500. Dec.31 Made the…arrow_forward
- Journal Entries for Accounts and Notes ReceivableLancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $18,000, 60 day, eight percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received a $21,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $17,000, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method  of providing for credit losses. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off  during this first year have created a debit balance in the Allowance for Doubtful Accounts of  $25,600. An analysis of aged receivables indicates that the desired balance of the  allowance account should be $22,500. Dec.31 Made the…arrow_forwardJournal Entries for Accounts and Notes ReceivableLancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $15,000, 60 day, eight percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received a $18,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $14,400, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore’s account as uncollectible. Lancaster, Inc., uses the allowance method  of providing for credit losses. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off  during this first year have created a debit balance in the Allowance for Doubtful Accounts of  $22,600. An analysis of aged receivables indicates that the desired balance of the  allowance account should be $19,500. Dec.31 Made the…arrow_forwardJournal Entries for Accounts and Notes ReceivableLancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $18,000, 60 day, eight percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received a $21,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $17,000, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method  of providing for credit losses. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off  during this first year have created a debit balance in the Allowance for Doubtful Accounts of  $25,600. An analysis of aged receivables indicates that the desired balance of the  allowance account should be $22,500. Dec.31 Made the…arrow_forward
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