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    Machete Company Requirement: Prepare Journal Entries Debit Credit

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    Anonn
    The document contains journal entries for Machete Company related to the sale of land for a note receivable in January, the collection of the note and interest in April, and the accrual of additional interest in December. In January, land was sold for a note receivable, recording the note, land, and gain on sale. In April, cash was collected for the principal and interest on the note, recording interest income and expense. In October, the remaining accounts receivable was collected in cash. In December, additional accrued interest income was recorded.

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    Machete Company Requirement: Prepare Journal Entries Debit Credit

    Uploaded by

    Anonn
    479 views1 page
    The document contains journal entries for Machete Company related to the sale of land for a note receivable in January, the collection of the note and interest in April, and the accrual of additional interest in December. In January, land was sold for a note receivable, recording the note, land, and gain on sale. In April, cash was collected for the principal and interest on the note, recording interest income and expense. In October, the remaining accounts receivable was collected in cash. In December, additional accrued interest income was recorded.

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    Intermediate Accounting1

    Original Title

    9-6

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    The document contains journal entries for Machete Company related to the sale of land for a note receivable in January, the collection of the note and interest in April, and the accrual of additional interest in December. In January, land was sold for a note receivable, recording the note, land, and gain on sale. In April, cash was collected for the principal and interest on the note, recording interest income and expense. In October, the remaining accounts receivable was collected in cash. In December, additional accrued interest income was recorded.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    479 views1 page

    Machete Company Requirement: Prepare Journal Entries Debit Credit

    Uploaded by

    Anonn
    The document contains journal entries for Machete Company related to the sale of land for a note receivable in January, the collection of the note and interest in April, and the accrual of additional interest in December. In January, land was sold for a note receivable, recording the note, land, and gain on sale. In April, cash was collected for the principal and interest on the note, recording interest income and expense. In October, the remaining accounts receivable was collected in cash. In December, additional accrued interest income was recorded.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 1

    Machete Company

    Requirement: Prepare journal entries Debit Credit

    Jan-01 Note receivable 2,000,000


    Land 1,500,000
    Gain on sale of land 500,000

    Apr-01 Cash 2,021,000


    Interest expense 29,000
    Liability for notes receivable discounted 2,000,000
    Interest income 50,000

    Principal 2,000,000
    Interest (2m*10%*9/12) 150,000
    Maturity value 2,150,000
    Discount (2,150,000*12%*6/12) 129,000
    Net proceeds 2,021,000

    Principal 2,000,000
    Accrued interest receivable (2m*10%*3/12) 50,000
    Carrying amount of NR 2,050,000

    Net proceeds 2,021,000


    Less: Carrying amount of NR 2,050,000
    Interest expense 29,000

    Oct-01 Accounts receivable 2,160,000


    Cash (2,150,000+10,000) 2,160,000

    1 Liability of notes receivable discounted 2,000,000


    Note receivable 2,000,000

    Dec-31 Cash 2,248,000


    Accounts receivable 2,160,000
    Interest income (2,160,000*12%%3/12) 64,800

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