Dekon Company’s December 31 year-end unadjusted trial balance shows an $8,000 balance in Notes
Receivable. This balance is from one 6% note dated December 1, with a period of 45 days. Prepare
Journal entries for December 31 and for the note’s maturity date assuming it is honored.

Here is what I got, so can someone please let me know what needs to be changed or if I am right? Thanks

Dec. 31 Debit Interest Receivable 40
Credit interest revenue 40


Jan. 15 Debit Cash 8480
Credit Notes Receivable 8,000
Credit Interest revenue 440
Credit Interest Receivable 40
To record full payment of note

Quote:

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Originally Posted by slh6582

Dekon Company’s December 31 year-end unadjusted trial balance shows an $8,000 balance in Notes
Receivable. This balance is from one 6% note dated December 1, with a period of 45 days. Prepare
journal entries for December 31 and for the note’s maturity date assuming it is honored.

Here is what I got, so can someone please let me know what needs to be changed or if I am right? Thanks

Dec. 31 Debit Interest Receivable 40
Credit interest revenue 40


Jan. 15 Debit Cash 8480
Credit Notes Receivable 8,000
Credit Interest revenue 440
Credit Interest Receivable 40
To record full payment of note

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Let me change that up a bit... On Jan 15 cash should be debited 8060 and interest revenue 20, right?

You are correct on the second posting.

Dr. Cash 8,060
Cr. Interest Rec 40
Cr. Interest Revenue 20
Cr. Notes Rec 8,000