Milner Family Importers sold goods to Tung Decorators for $38,200 on November 1,
ID: 2490255 • Letter: M
Question
Milner Family Importers sold goods to Tung Decorators for $38,200 on November 1, 2014, accepting Tung's $38,200, 6-month, 7% note. Prepare Milner's November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)Explanation / Answer
Date Account title and explanation Debit Credit 1-Nov 7% Note receivable $38,200 Sales $38,200 To record sale of goods on note 31-Dec Interest receivable on 7% note (38200*7%*2/6) $891 Interest income $891 To record sale of goods on note 1-May Bank $40,874 7% Note receivable $38,200 Interest receivable on 7% note (38200*7%*2/6) $891 Interest income (38200*7%*4/6) $1,783 To record realisation of note receivable and interest there on