Question

Sunland Company had the following select transactions.

Apr.	1,	2020		Accepted Goodwin Company’s 12-month, 16% note in settlement of a $55,800 account receivable.
July	1,	2020		Loaned $57,800 cash to Thomas Slocombe on a 9-month, 14% note.
Dec.	31,	2020		Accrued interest on all notes receivable.
Apr.	1,	2021		Received principal plus interest on the Goodwin note.
Apr.	1,	2021		Thomas Slocombe dishonored its note; Sunland expects it will eventually collect.

Prepare journal entries to record the transactions. Sunland prepares adjusting entries once a year on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Prepare journal entries to record the transactions. Larkspur prepares adjusting entries once a year on December 31. (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.)

Date (Choose a date below for each)	Account Titles and Explanation	Debit	Credit
4/1/22	Notes receivable-Goodwin Company	55800
	Account receivable-Goodwin Company		55800
7/1/22	Notes receivable-Thomas	57800
	Cash		57800
12/31/22	Interest receivable	6696
	Interest revenue (55800*16%*9/12)		6696
	(To record interest accrued on Goodwin note)
12/31/22	Interest receivable	4046
	Interest revenue (57800*14%*6/12)		4046
	(To record interest accrued on Thomas note)
4/1/23	Cash	64728
	Notes receivable-Goodwin Company		55800
	Interest receivable		6696
	Interest revenue		2232
	(To record collection of Goodwin note and interest)
4/1/23	Account receivable-Thomas	63869
	Notes receivable-Thomas		57800
	Interest receivable		4046
	Interest revenue		2023
	(To record the dishonor of Thomas note)