On May 16, 20X1, Safeway Company received a 90-day, 10 percent, $7,000 interest-bearing note from Black Company in settlement of Black's past-due account. On June 30, Safeway discounted this note at Fargo Bank and Trust. The bank charged a discount rate of 15 percent. On August 14, Safeway received a notice that Black had paid the note and the interest on the due date. Required: Prepare the entries in general journal form to record these transactions. Analyze: If the company prepared a balance sheet on July 31, 20X1, how should Notes Receivable-Discounted be presented on the statement? Complete this question by entering your answers in the tabs below. General Journal Analyze Prepare the entries in general journal form to record these transactions. (Use 360 days a year. Round your intermediate calculations and final answers to 2 decimal places.) View transaction list Journal entry worksheet 1 2 Record entry for a 90-day, 10% note accepted for past-due account. Date May 16, 20X1 3 Note: Enter debits before credits. Record entry General Journal Clear entry >

On May 16, 20X1, Safeway Company received a 90-day, 10 percent, $7,000 interest-bearing note from Black Company in settlement of Black's past-due account. On June 30, Safeway discounted this note at Fargo Bank and Trust. The bank charged a discount rate of 15 percent. On August 14, Safeway received a notice that Black had paid the note and the interest on the due date. Required: Prepare the entries in general journal form to record these transactions. Analyze: If the company prepared a balance sheet on July 31, 20X1, how should Notes Receivable-Discounted be presented on the statement? Complete this question by entering your answers in the tabs below. General Journal Analyze Prepare the entries in general journal form to record these transactions. (Use 360 days a year. Round your intermediate calculations and final answers to 2 decimal places.) View transaction list Journal entry worksheet 1 2 Record entry for a 90-day, 10% note accepted for past-due account. Date May 16, 20X1 3 Note: Enter debits before credits. Record entry General Journal Clear entry >

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

ChapterD: Notes Payable And Notes Receivable

Section: Chapter Questions

Problem 5P

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Similar questions

On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
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