Exercise 812 Vandiver Company had the following select trans

Exercise 8-12 Vandiver Company had the following select transactions. Apr. 1, 2017 Accepted Goodwin Company\'s 12-month, 12% note in settlement of a $30,000 account receivable. July 1, 2017 Loaned $25,000 cash to Thomas Slocombe on a 9-month, 10% note. Dec. 31, 2017 Accrued interest on all notes receivable. Apr. 1, 2018 Received principal plus interest on the Goodwin note. Apr. 1, 2018 Thomas Slocombe dishonored its note; Vandiver expects it will eventually collect. Prepare journal entries to record the transactions. Vandiver 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.) DateAccount Titles and Explanation Debit Credit 4/1/17 Notes Receivable Accounts Receivable 7/1/17 Notes Receivable Cash 12/31/17 Interest Receivable Interest Revenue (To record interst on Goodwin Co note.) 4/1/17 ?|cash licy I 92000-2018 John Wiley & Sons. Inc. All Rights Reserved. A Division of John Wiley & Sons. Inc Version 4.24

Solution

Date Account titles & explanations Debit Credit 4/1/2017 Note receivable 30,000 Accounts receivable -goodwin 30,000 7/1/2017 Note receivable 25,000 Cash 25,000 12/31/2017 interest receivable 2700 interest revenue 2,700 (30,000*12%*9/12) 12/31/2017 interest receivable 1250 interest revenue 1,250 (25,000*10%*6/12) 4/1/2018 cash 33,600 interest revenue (30,000*12%*3/12) 900 interest receivable 2,700 note receivable 30,000 4/1/2018 Account receivab;e 26,875 interest revenue (25000*10%*3/12) 625 interest receivable 1,250 note receivable 25,000