Homework SourseExercise 913 On May 2 McLain Company lends 90400 to Chang In
Exercise 9-13
On May 2, McLain Company lends $90,400 to Chang, Inc., issuing a 6-month, 12% note. At the maturity date, November 2, Chang indicates that it cannot pay.
Solution
Journal entry :
| Date | account & explanation | debit | credit |
| May 2 | Notes receivable | 90400 | |
| Cash | 90400 | ||
| (To record lend money) | |||
| Nov 2 | Cash | 95824 | |
| Notes receivable | 90400 | ||
| Interest revenue (90400*12%*6/12) | 5424 | ||
| (To record collection) | |||
| Nov 2 | Account receivable | 95824 | |
| Notes receivable | 90400 | ||
| Interest revenue | 5424 | ||
| (TO record dishonor bill) | |||
