Asked by Kiran Neena on Jul 17, 2024
Verified
Prepare the necessary journal entries for the following transactions for Bush Co.
May 25 Bush Co. received a $25000 2-month 6% note from Bolt Company in settlement of an account receivable.
July 25 Bush Co. received payment on the Bolt note.
Settlement
The process of concluding a transaction or an agreement by completing all procedural and payment aspects.
Account Receivable
Accounts Receivable represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.
- Develop bookkeeping entries for transactions pertinent to notes receivable, embracing the accrual of interest and the process of collection.
Verified Answer
SA
sally alabdaliJul 20, 2024
Final Answer :
May25 Notes Receivable. 25,000Accounts Receivable 25,000July25 Cash 25,250 Notes Receivable 25,000 Interest Revenue ($25,000×.06×2/12) 250\begin{array}{ll} \text { May\quad 25} & \text { Notes Receivable. } &25,000\\& \text {Accounts Receivable } &&25,000\\\\\text {July\quad 25 } & \text { Cash } &25,250\\ &\text { Notes Receivable } &&25,000\\& \text { Interest Revenue \( (\$ 25,000 \times .06 \times 2 / 12) \) } &&250\\ \\\end{array} May25July25 Notes Receivable. Accounts Receivable Cash Notes Receivable Interest Revenue ($25,000×.06×2/12) 25,00025,25025,00025,000250
Learning Objectives
- Develop bookkeeping entries for transactions pertinent to notes receivable, embracing the accrual of interest and the process of collection.
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