Answer:
Jan. 5
Dr Account Receivable $4,000
Cr Sales $4,000
(to record sales to Rian)
Feb. 2
Dr Promissory note Receivable $4,000
Cr Account Receivable $4,000
(to record acceptance of Rian company's note)
Feb. 12
Dr Promissory note Receivable $12,000
Cr Sales $12,000
(to record sales to Cato company through acceptance its notes)
Feb. 26
Dr Account Receivable $5,200
Cr Sales $5,200
(to record sales to Malcolm)
Apr. 5
Dr Promissory note Receivable $5,200
Cr Account Receivable $5,200
( to record acceptance of Malcolm notes)
Apr. 12 ( assume Cato's note is collected)
Dr Cash $12,200
Cr Promissory note Receivable $12,000
Cr Interest Income $200
(to record the collection of Cato's note)
June. 2 ( assume Rian's note is collected)
Dr Cash $4,120
Cr Promissory note Receivable $4,000
Cr Interest Income $120
(to record the collection of Rian's note)
Jul. 5
Dr Cash $5,304
Cr Promissory note Receivable $5,200
Cr Interest Income $104
(to record the collection of Malcolm's note)
Explanation:
The calculation of Interest income from the Notes of the three companies as followed:
Rian: 4,000 x 9% x 4/12 = $120
Cato: 12,000 x 10% x 2/12 = $200
Malcolm: 5,200 x 8% x 3/12 = $104.
Further explanation has been put as description under each journal entries listed above.
Cost of goods sold is not included for each sales entries as guided in the question.
