Vandiver Company had the following select transactions : Apr. 1, 2017 - Accepted Goodwin...
Question:
Vandiver Company had the following select transactions :
| Apr. 1, 2017 | Accepted Goodwin Company's 12-month, 10% note in settlement of a $26,400 account receivable. |
| July 1, 2017 | Loaned $28,400 cash to Thomas Slocombe on a 9-month, 8% note. |
| Dec. 31, 2017 | Accrued interest on all notes receivable. |
| Apr. 1, 2018 | Received principal plus interest on the Goodwin note. |
| Apr. 1, 2018 | Thomas Slocombe dishonored its note; Vandiver expects it will eventually collect. |
Prepare journal entries to record the transactions.
Vandiver prepares adjusting entries once a year on December 31.
(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
| Date | Account Titles and Explanation | Debit | Credit |
|---|---|---|---|
| 4/1/17 | |||
| 7/1/17 | |||
| 12/31/17 | |||
| 4/1/18 | |||
| (To record interest at 10%.) | |||
| (To record interest at 8%.) | |||
| (To record principal plus interest on the Goodwin note.) | |||
| (To record note dishonoured.) |
Notes Receivable:
Notes receivable pertains to the company's receivable supported with notes, this can either be interest or non-interest bearing. For interest bearing notes that do not mature at the end of the year (i.e., calendar or fiscal year), the company is required to accrue interest income.
Answer and Explanation: 1
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View this answer| Account title and Description | Debit | Credit | |
|---|---|---|---|
| April 1, 2017 | Notes receivable | 26,400 | |
| Accounts receivable | 26,400 | ||
| July 1,... |
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