Vandiver Company had the following select transactions : Apr. 1, 2017 - Accepted Goodwin...


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
(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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Account title and Description Debit Credit
April 1, 2017 Notes receivable 26,400
Accounts receivable 26,400
July 1,...

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Learn more about this topic:

Notes Receivable: Definition, Maturity Date & Interest


Chapter 7 / Lesson 6

Learn what loan maturity date is and how it affects your final loan payment. Find out the difference between short-term, medium-term, and long-term maturity dates.

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