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ACCT 382 - Week 7 - Chapter 7 Homework - Question 9

ACCT 382 - Week 7 - Chapter 7 Homework - Question 9
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ACCT 382 - Week 7 - Chapter 7 Homework - Question 9

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Question 9

Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2013. The note, along with interest at 10%, is due on July 1, 2013. On February 28, 2013, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 12%.

Required:

Prepare the journal entries required on February 28, 2013, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Date

General Journal

Debit

Credit

February 28, 2013

Interest receivable

250

 
 

Interest revenue

 

250

       

February 28, 2013

Cash

15,120

 
 

Loss on sale of note receivable

130

 
 

Note receivable

 

15,000

 

Interest receivable

 

250