Following are selected transactions for vitalo company. nov. 1 accepted a $6,000, 180-day, 8% note dated november 1 from kelly white

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Following are selected transactions for Vitalo Company:
On November 1, Vitalo Company accepted a $6,000, 180-day, 8% note dated November 1 from Kelly White as a time extension on her past-due account receivable. On December 31, the company adjusted the year-end accounts for the accrued interest earned on the White note. On April 30, White honored her note when presented for payment. Please note that February has 28 days for this year.
First, complete the table below to calculate the interest amounts as of December 31 and April 30. (Use a 360-day year for these calculations.)

Anonymous · Accepted Answer

As at April 30Dr. Account Receivable (120 days / 180 days x 6000 x 0.08) ..$320Cr. Interest Income$320Being accrued interest Income for current year to date on note receivable Dr. Bank$6,483Cr. Accounts Receivable ($6000 note receivable + $163 + $320)...$6,483Being settlement of note receivable with total accrued interest Income Explanation:Following are selected transactions for Vitalo Company. Nov. 1 Accepted a $6,000, 180-day, 8% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable. As at November 1Account receivable = $6,000 and Note Receivable = $6000Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note. As at December 31Dr. Account Receivable (61 days /180 days x 6000 x 0.08) ..$163Cr. Interest Income$163Apr. 30 White honored her note when presented for payment; February has 28 days for the current year.As at April 30Dr. Account Receivable (120 days / 180 days x 6000 x 0.08) ..$320Cr. Interest Income$320Being accrued interest Income for current year to date on note receivableDr. Bank$6,483Cr. Accounts Receivable ($6000 note receivable + $163 + $320)...$6,483Being settlement of note receivable with total accrued interest Income

Anonymous · Answer

The adjustments needed for December 31 and April 30 are:December 31, journal entry to record accrued interest revenue.Dr Interest receivable 80.22     Cr Accrued interest revenue 80.22April 30, note is collectedDr Cash 6,236.71     Dr Accounts receivable 6,000     Dr Interest receivable 80.22     Dr Interest revenue 156.49Explanation: Interest per day = 1/365 x 8% x $6,000 = $1.315 per dayNovember has 30 days and December 31 = 61 days x $1.315 per day = $80.22Total interest charged on the note = 180 days x $1.315 per day = $236.71

Anonymous

Following are selected transactions for vitalo company. nov. 1 accepted a $6,000, 180-day, 8% note dated november 1 from kelly white

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