Question

Exercise 8-13

Larkspur Company had the following select transactions.

Apr.	1, 2022		Accepted Goodwin Company’s 12-month, 6% note in settlement of a $43,000 account receivable.
July	1, 2022		Loaned $23,000 cash to Thomas Slocombe on a 9-month, 12% note.
Dec.	31, 2022		Accrued interest on all notes receivable.
Apr.	1, 2023		Received principal plus interest on the Goodwin note.
Apr.	1, 2023		Thomas Slocombe dishonored its note; Larkspur expects it will eventually collect.

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
4/1/227/1/2212/31/224/1/23
4/1/227/1/2212/31/224/1/23
4/1/227/1/2212/31/224/1/23
	(To record interest accrued on Goodwin note)
4/1/227/1/2212/31/224/1/23
	(To record interest accrued on Thomas note)
4/1/227/1/2212/31/224/1/23
	(To record collection of Goodwin note and interest)
4/1/227/1/2212/31/224/1/23
	(To record the dishonor of Thomas note)

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	43000
	Account receivable-Goodwin Company		43000
7/1/22	Notes receivable-Thomas	23000
	Cash		23000
12/31/22	Interest receivable	1935
	Interest revenue (43000*6%*9/12)		1935
	(To record interest accrued on Goodwin note)
12/31/22	Interest receivable	1380
	Interest revenue (23000*12%*6/12)		1380
	(To record interest accrued on Thomas note)
4/1/23	Cash	45580
	Notes receivable-Goodwin Company		43000
	Interest receivable		1935
	Interest revenue		645
	(To record collection of Goodwin note and interest)
4/1/23	Account receivable-Thomas	25070
	Notes receivable-Thomas		23000
	Interest receivable		1380
	Interest revenue		690
	(To record the dishonor of Thomas note)