On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Indigo Company?

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Advanced Placement (AP)

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8 July, 21:31

On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Indigo Company?

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Ivy Cooke · Answer 1

We are given,

60-day 10%, $4,500 note accepted by Hong Company from Indigo Company.

The journal entry needed to record the transaction by Indigo Company is cash payment or disbursement journal. This contains all transactions with payments and disbursements. This includes overdue accounts and accounts payable.