Ask Experts Questions for FREE Help !
Ask
    Misspurered's Avatar
    Misspurered Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Aug 3, 2014, 12:42 AM
    Adjusting entry: Note recievable
    The notes receivable were accepted from several customers. The notes were issued on sept. 1,2014 and will be settled together with a 20% interest on may 31,2015.

    Notes receivable:360 000
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Aug 3, 2014, 12:53 PM
    For the adjusting entry you need to compute the amount of interest that is due. So if this is at year end on 31 Dec you have to calculate 4 months of interest.

    The formula to calculate interest is: Interest = Principal * Rate * Time

    $360,000 * 20% * 4/12 = Interest Earned

    The accounts used for this adjusting entry will be Interest Revenue and Interest Receivable
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Adjusting entry - depreciation, note payable [ 0 Answers ]

Hi everyone, I've been trying to understand and figure out how to tackle this, but it just confuses me even more (or maybe I'm overthinking it). If anyone can please explain this to me, and help how how to journalize it that would be appreciated :) .. van was purchased Oct 1 2009. Useful life...

Transfer Accounts Recievable balance to a Note [ 1 Answers ]

Included in WWC's February 1 Accounts Receivable balance is a $2,000 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $2,000 balance to a note. And Kit Kat signs a 6-month not, at 12%...

Note Payble Adjusting Entry [ 1 Answers ]

This is the adjusting entry statement: The $48,000 note payable is dated August 31, 2004, and bears interest at 12 percent per annum. The note and interest are payable at the maturity on November 13, 2004. (Assume a 365-day year and round to the nearest dollar) I am preparing adjusting...

Adjusting entries: how to journalize a specific adjusting entry [ 1 Answers ]

How would I journalize this adjusting entry? Invoices representing $1,000 of services performed during the month have not been recorded as of May 31. :confused:

What do I debit/credit in journal entry/adjusting entry? [ 1 Answers ]

Hi. I am unsure about the correct way to debit/credit these entries. Can someone help me? Window Washing Company opened on July 1, 2010. During July the following transactions were completed: July 1 Issued 14,456 shares of common stock for $14,456 cash. July 1 Purchased used truck for...

View more questions Search