Answer:
Feb 6
Dr Account receivable $97,000
Cr Sales revenue $97,000
Jul 1
Dr Notes receivable $18,000
Cr Cash $18,000
Dec 31
Dr Interest receivable $630
Cr Interest revenue $630
July 1
Dr Cash $19,260
Cr Notes receivable $18,000
Cr Interest receivable $630
Cr Interest revenue $630
(To record collection)
Explanation:
Preparation of the journal entries
Feb 6
Dr Account receivable $97,000
Cr Sales revenue $97,000
(To credit sales)
Jul 1
Dr Notes receivable $18,000
Cr Cash $18,000
(To record loan given)
Dec 31
Dr Interest receivable ($18000*7%*6/12) $630
Cr Interest revenue $630
(To record accrued interest)
July 1
Dr Cash $19,260
($18,000+$630+630)
Cr Notes receivable $18,000
Cr Interest receivable $630
Cr Interest revenue $630
(To record collection)
