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maksim [4K]
3 years ago
11

Following are selected transactions for Vitalo Company.

Business
1 answer:
attashe74 [19]3 years ago
5 0

Answer:

Vitalo Company

Journal Entries

Nov. 1       Notes Receivable         $ 3000 Dr.

                Accounts Receivable          $ 3000 Cr.

Accepted a $3,000, 180-day, 7% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.

Dec. 31   Interest Receivable   $ 35   Dr.

                   Interest Income           $ 35 Cr.

( $ 3000* 7% * 180/360= $ 3000*7%* 0.5= $ 105)At Dec this amount would be

($ 105 / 6) *2= $35

Adjusted the year-end accounts for the accrued interest earned on the White note.

Apr. 30            Cash             $ 3105  

                            Notes Receivable       $ 3000

                             Interest Receivable    $ 105

White honored her note when presented for payment; February has 28 days for the current year.

                     

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