Credit Notes Accounting
Please help me with these last two Accounting Questions?
1. A $6,000, 30-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is
a) debit Accounts Receivable, $6,060; credit Notes Receivable, $6,000; Credit Interest Revenue, $60
b) debit Accounts Receivable, $6,060; credit Notes Receivable, $6,000; Credit Interest Receivable, $60
c) debit Notes Receivable, $6,060; credit Accounts Receivable, $6,060
d) debit Cash, $6,060; credit Notes Receivable, $6,060
I know it is either A or B? Second opinion?
2.Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is
a) $17,500
b) none of the above
c) $18,500
d) $18,000
Number 1 is actually A
Interest Revenue – not receivable.
AutoCount Video 23: A/R Receive Payment & A/R Credit Note Entry
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