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    fatnaqvi25's Avatar
    fatnaqvi25 Posts: 4, Reputation: 1
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    #1

    Dec 20, 2010, 06:25 AM
    Journal entry: The president informs you that beverly's building products...
    The president informs you that beverly's building products agrees to convert the $14,000 overdue accounts receivable(invoice No.1119) balance to a 12% note due six months from today.

    Is this entry correct?

    Notes Receivable dr 10,080
    Accounts Receivable cr 10,080
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Dec 20, 2010, 09:30 AM

    Debit Notes Receivable for $14,000 and Credit Accounts Receivable for $14,000

    I do not know where your 10,080 came from

    The 12% is interest that the customer will pay in addition to the $14,000 that is owed.
    fatnaqvi25's Avatar
    fatnaqvi25 Posts: 4, Reputation: 1
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    #3

    Dec 20, 2010, 09:58 AM
    Comment on pready's post
    I multiplied 14,000 by 12% and then multiplied it by 6... for six months...
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