Answer: Please refer to Explanation
Explanation:
The following is a compound journal. I shall record the accounts that need to be debited first and then the account to be credited.
Dec 6
DR Notes Receivable - Concord Sounds $9,000
CR Accounts Receivable - Concord Sounds $9,000
(To record note received as settlement)
Dec 31
DR Interest Receivable (9,000 * 12% * ((25 days since Dec 6)/360) $ 75
CR Interest Revenue $75
(To record accrued interest)
Dec 31
DR Interest Revenue $75
CR Cash $75
(To record closing entry on interest revenue)
Mar 6
DR Cash $9,270
CR Notes Receivable - Concord Sounds $9,000
CR Interest Receivable $75
CR Interest Revenue (9,000 * 12% * 65/360) $195
(To record Collected note)
Jun 30
DR Notes Receivable - Main Street Music $11,000
CR Cash $11,000
(To record Note Received)
Oct 2
DR Notes Receivable - Salem Sounds $9,000
CR Sales Revenue - Salem Sounds $9,000
(To record Note Received)
Dec 1
DR Accounts receivable - Salem Sounds $9,180
CR Notes Receivable $9,000
CR Interest Receivable (9,000 * 12% * 60/360) $180
Dec 1
DR Allowance for Bad Debt $9,180
CR Accounts Receivable - Salem Sounds $9,180
(To record receivable written off)
Dec 30
DR Cash $11,660
CR Notes Receivable - Main street Music $11,000
CR Interest Revenue (11,000* 12% * ( 6 months / 12) ) $660
(To record collection of Note - MS)
