The following selected transactions were completed by Fasteners Inc. Co., a supp

Question

The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing: 20Y3 Nov. 21 Received from McKenna Outer Wear Co., on account, a $78,000, 60-day, 8% note dated November 21 in settlement of a past due account. Dec. 31 Recorded an adjusting entry for accrued interest on the note of November 21. 20Y4 Jan. 20 Received payment of note and interest from McKenna Outer Wear Co. Journalize the entries to record the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

CHART OF ACCOUNTSFasteners Inc. Co.General Ledger

Interest Expense

Journalize the entries to record the transactions for the year 20Y3. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

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JOURNAL

ACCOUNTING EQUATION

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Journalize the entries to record the transactions for the year 20Y4. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

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JOURNAL

ACCOUNTING EQUATION

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ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-McKenna Outer Wear Co. 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment

Explanation / Answer

Journal
Accounting Equation

Date Description Post Ref Debit Credit Assets Liabilities Equity 1 Nov 21 Notes receivable $78000 78000 Accounts receivable-McKenna Outer Wear Co. $78000 -78000 2 Dec 31 Interest receivable
(78000 x 8% x 40/360) 693 693 Interest revenue 693 693 3 Jan 20 Cash 79040 79040 Interest revenue
(78000 x 8% x 20/360) 347 347 Interest receivable 693 -693 Notes receivable 78000 -78000

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