Question

Entries for Receipt and Dishonor of Note Receivable Journalize the following transactions of Trapper Jon’s Productions. Assume 360 days in a year. For a compound transaction, if an amount box does not require an entry, leave it blank. June 23 Received a $48,000, 90-day, 8% note dated June 23 from Radon Express Co. on account. Sept. 21 The note is dishonored by Radon Express Co. Oct. 21 Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Radon Express Co. on September 21.

Answer 1

Answer:

See explanation section.

Explanation:

June 23, Notes receivable           Debit     = $48,000

Accounts receivable                    Credit   = $48,000

To record the note receivable from Radon Express.

September 21, Accounts receivable    Debit     = $48,960

Notes receivable                                   credit     = $48,000

Interest revenue                                                   = $960

Calculation: Interest revenue = [($48,000 × 8%) ÷ 360] × 90 = $960

To record the dishonor of Note Receivable.

October 21, Cash                     Debit = $49,368

Accounts receivable               Credit = $48,960

Interest revenue                      Credit = $408

Calculation: Interest revenue = [($48,960 × 10%) ÷ 360] × 30 = $408

To record the received of previously dishonored Notes Receivable with a 10% interest.