Question

The following selected transactions were completed by Interlocking Devices Co., a supplier of zippers for clothing:

Answer 1

Answer:

Given below

Explanation:

Interlocking Devices Co.

Journal Entries

Date     Account No      Particulars             Debit           Credit

Dec. 10.      132      Notes Receivable       $ 42000

                  121      Accounts Receivable

                    -Unitarian Clothing & Bags Co.                 $ 42000

Received from Unitarian Clothing & Bags Co., on account, a $42,000, 90-day, 8% note dated December 10.

Dec 31.      131         Interest Receivable      276.16

                 610                  Interest Revenue                   276.16

(42,000 * 8 % * 30/365) = $ 276.16

Recorded an adjusting entry for accrued interest on the note of December 10.

Dec 31        610       Interest Revenue       276.16

                  313        Income Summary                       276.16

Recorded the closing entry for interest revenue. 2018    

                 

Mar 10.        110                 Cash                      $ 42,828.49          

                     132      Notes Receivable                                $ 42000

                       610                  Interest Revenue                    $ 828.49

Received payment of note and interest from Unitarian Clothing & Bags Co.