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Record the following transactions for Sandwich Co
Record the following transactions for Sandwich Co. in the general journal.
2005
May 1 Received an $8,700, 1-year, 10% note in exchange for Linda Anderson's outstanding accounts receivable.
Dec. 31 Accrued interest on the Anderson note.
Dec. 31 Closed the interest revenue account.
2006
May 1 Received principal plus interest on the Anderson note. (No interest has been accrued in 2006).
Expert Solution
Journalize entries -
Record the following transactions for Sandwich Co. in the general journal.
2005
May 1 Received an $8,700, 1-year, 10% note in exchange for Linda Anderson's outstanding accounts receivable.
Dec. 31 Accrued interest on the Anderson note.
Dec. 31 Closed the interest revenue account.
May 1 Notes Receivable 8,700
Accounts Receivable 8,700
Dec. 31 Interest Receivable 580
Interest Income 580
(8,700 x 10%)/12 x 8 months = 580
Dec. 31 Interest Income 580
Income Summary 580
2006
May 1 Received principal plus interest on the Anderson note. (No interest has been accrued in 2006.)
May 1 Cash 9,570
Notes Receivable 8,700
Interest Receivable 580
Interest Income 290.
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