Prepare journal entries to record these selected transactions for Eduardo Company.
|Nov. 1||Accepted a $5,000, 180-day, 6% note dated November 1 from Melosa Allen in granting a time extension on her past-due account receivable.|
|Dec. 31||Adjusted the year-end accounts for the accrued interest earned on the Allen note.|
|Apr. 30||Allen honors her note when presented for payment; February has 28 days for the current year.|
A company's accounts receivable (AR) is the balance due to them for goods or services delivered or used, but not yet paid for. In the balance sheet, accounts receivable is just a current asset. The amount a client owes for purchases made with credit is called AR. Accounts receivable is the standard way to measure a company's liquidity, or its ability to meet short-term obligations without generating new cash flow.
Answer and Explanation: 1
|Date||Particulars||Debit ($)||Credit ($)|
|1-Nov||Notes receivable - Melosa Allen||$5,000...|
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fromChapter 3 / Lesson 20
Learn what accounts receivables (AR) are and understand their purpose in business. Explore different examples of AR and what the journal entry for it is.