Question

Entries for Note Collected by Bank Accompanying a bank statement for Santee Company is a credit memo for $15,120 representing the principal ($14,000) and interest ($1,120) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Journalize the entry that should be made by the company to bring the accounting records up to date. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Answer:

Debit Bank $15,120 Credit Notes receivable $14,000 Credit Interest income $1,120

Explanation:

The Credit memo is a document to explain or support the repayment of the loan.