Question

The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:

Answer 1

Solution and Explanation:

The following journal entries will be passed in the book sof fasteners Inc., Co., which is a supplier of buttons and zippers for clothing

Date        Accounts Titles and Explanation  Post Ref    Debit  Credit

1 Nov-21  Notes receivable                                      $ 72,000  

      Accounts receivable-McKenna Outer Wear Co.        $ 72,000

2  Dec-31  Interest receivable $(72000 * 9 \% * 40 / 360)$    $720  

 Interest revenue                                                     $ 320

3  Jan-20  Cash                                           $ 73080  

 Interest revenue $(72000 * 9 \% * 20 / 360)$         $360

 Interest receivable                                          $720

 Notes receivable                                               $72,000

Note: the figures have been calculated and rounded off in the nearest dollar amount.