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2 January, 02:55

The following transactions took place for Parker's Grocery. a. Jan. 1 Loaned $47,000 to a cashier of the company and received back a one-year, 10 percent note. b. June 30 Accrued interest on the note. c. Dec. 31 Received interest on the note. (No interest has been recorded since June 30.) d. Dec. 31 Received principal on the note.

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  1. 2 January, 06:17
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    The journal entries for the followings are shown below:

    Explanation:

    a.

    On Jan 1

    Loan A/c ... Dr $47,000

    Cash A/c ... Cr $47,000

    Being the loan is cashed of the company

    b.

    On June 30

    Interest receivable A/c ... Dr $2,350

    Interest Revenue A/c ... Cr $2,350

    Being interest accrued on the note

    c.

    On Dec 31

    Cash A/c ... Dr $4,700

    Interest receivable A/c ... Cr $2,350

    Interest revenue A/c ... Cr $2,350

    Being interest received on the note

    d.

    Cash A/c ... Dr $47,000

    Loan A/c ... Cr $47,000

    Being received principal on the note

    Working Note:

    Interest = Amount * 10% * 6 / 12

    Interest = $47,000 * 10% * 6/12

    Interest = $2,350
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