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16 May, 05:55

Giorgio Italian Market bought $4,200 worth of merchandise from Food Suppliers and signed a 90-day, 8% promissory note for the $4,200. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

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  1. 16 May, 07:20
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    Dr. Cash $4,200

    Cr. Interest Income $84

    Cr. Note Receivable $4,116

    Explanation:

    Food Suppliers

    Interest on the Note = $4,200 x 8% x 90 / 360 = $84

    Amount to be recorded = $4,200 - $84 = $4,116

    At the Time of Issuance the Journal Entry was

    Dr. Note receivable $4,116

    Cr. Sales $4,116

    So, the Payment of $4,200 will be made.

    The Interest Income will be $84

    Now the Note Receivable account will be adjusted by receiving cash and recording interest income.
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Home » Business » Giorgio Italian Market bought $4,200 worth of merchandise from Food Suppliers and signed a 90-day, 8% promissory note for the $4,200. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)
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