Updated on August 6, 2022
J Biggs Co. has the following transactions related to notes receivable during the last 2 months of 2010. Journalize the tranasctions and record the collection of the Biggs note at its maturity in 2011.
Nov. 1 Loaned $15,000 cash to Henry Biggs on a 1-year, 10% note.
Dec. 11 Sold goods to Dr. Ppper, Inc., receiving a $6,750, 90-day, 8% note.
Dec 16 Received a $4,000, 6-month, 9% note in exchange for Bob Barker’s outstanding accounts receivable.
Dec 31 Accrued interest revenue on all notes receivable.
Journal: (I Filled out what I Know)
Nov 1st Notes Receivable ????? Debit
Cash ???? Credit
Dec 11th Notes Receivable ?????? Debit
Sales ????? Credit
Dec 16th Notes Receivable ?????? Debit
Acc Receivable ????? Credit
Dec 31st Interest Receivable ???? Debit
Interest Renevue ???? Credit
Cash ?????? Debit
Notes Receivable $15,000 Credit
Interest Renevue ?????? Credit
Interest Receivable $250 Credit
The ???? represents blanks and the numbers I cant figure out. I appreciate your time and help in advance!
The amounts are given for each transactions, just fill them in. For the accrued interest at the end of the year you have to calculate each note separately.
15,000 x 10% x 2/12 =
6,750 x 8% x 20/360 =
4,000 x 9% x 15/360 =
Now add them together
Collection of Biggs Note
15,000 x 105 = 1,500 Interest Collected
15,000 + 1,500 = 16,500 Total Cash Collected
Dr Cash 16,500
Cr Interest Revenue 1,250
Cr Interest Receivable 250
Cr Notes Receivable 15,000