Question

Oriole Company has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. (Omit cost of goods sold entries.)Nov. 1 Loaned $52,200 cash to C. Bohr on a 12-month, 7% note.
Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $1,800, 90-day, 8% note.
Dec. 16 Received a $4,800, 180-day, 10% note to settle an open account from A. Murdock.
Dec. 31 Accrued interest revenue on all notes receivable.Journalize the transactions for Crane Company

Answer 1

Answer:

See explanation

Explanation:

Nov. 1   Notes receivable - C. Bohr        Debit        $52,200

            Cash                                            Credit       $52,200

To record the loan provided to C. Bohr issuing a 7%, 12-month note.

Dec. 11  Notes receivable - K. R. Pine     Debit        $1,800

            Sales revenue                            Credit        $1,800

To record the sales revenue by issuing a 8%, 90-day note.

Dec. 16  Notes receivable - A. Murdock           Debit        $4,800

             Accounts receivable - A. Murdock     Credit        $4,800

To record the settlement of an open account by issuing a 180-day, 10% note.

Dec. 31   Interest Receivable           Debit       $681 (Note - 1)

              Interest Revenue               Credit      $681

To record the interest revenue accrued on December 31.

Calculation:

November 1 Interest from C. Bohr =  $52,200 × 7% × (2÷12) = $609

December 11 Interest from K. R. Pine = $1,800 × 8% × (20÷90) =  $32

December 16 Interest from A. Murdock = $4,800 × 10% × (15 ÷ 180) = $40

Total Interest = $681