Question

Exercise 8-10 Sheffield Corp. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. (Omit cost of goods sold entries.) Nov. 1 Loaned $62,400 cash to C. Bohr on a 12-month, 796 note. Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $1,800, 90-day, 796 note. Dec. 16 Received a $9,600, 180-day, 8% note to settle an open account from A. Murdock. Dec. 31 Accrued interest revenue on all notes receivable. Journalize the transactions for Sheffield Corp. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Answer 1

Note 1: Interest calculation for notes receivable hs/12 months $728 Nov. 1 note receivable interests $62,400 X 796 X 2months/12 months-$728 (2 months accrued) Dec.11 note receivable interests$1,800 X 796 X 20 days / 360 days-$7 (20 days accrued) Dec. 16 note receivable interest-$9,600 X 896 X 15/360-$32 (15 days accrued) Total interest accrued $ 728$7$ 32 -$767