Answer:Please see Explanation column for answers
Explanation:
The journal entry To record note received for accounts receivable.
Date Account Title $ Explanation Debit ($) Credit ($)
May 1, 2016 Note receivable 3,000
Accounts receivable - R. Stoney 3,000
The journal entry To record Interest accrued
Date Account Title $ Explanation Debit ($) Credit ($)
Dec 31, 2016 Interest receivable 120
Interest revenue 120
Calculation:
Interest receivable = Note amount x Interest rate x (Number of months from May 1, 2016 to December 31, 2016 / Number of months in a year)
= $3,000 x 6% x (8 / 12) = $120
The journal entry To record principal plus interest on the R. Stoney note.
Date Account Title $ Explanation Debit ($) Credit ($)
May 1, 2017 Cash 3,180
Note receivable 3,000
Interest receivable 120
Interest revenue 60
Calculation:
Interest revenue = Principal x Interest rate x (Number of months from January 1, 2017 to April 30, 2017 / Number of months in a year)
= $3,000 x 6% x (4 / 12) = $60
