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    Notes Receivable in Gonzalez Company's December Trial Balance

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    "Included in Gonzalez Company's December 31 trial balance is a note receivable of $12,000. The note is a 4-month, 10% note dated October 1. Prepare Gonzalez's December 31 adjusting entry to record $300 of accrued interest, and the February 1 journal entry to record receipt of $12,400 from the borrower."

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    Gonzalez Company's General Journal
    Date Details Debit Credit
    Dec 31 Accrued Interest (12000X.10X3/12) $300
    Interest income $300
    (To record adjusting entry for accrued interest on Note receivable @12% for three months from Oct 1 to Dec 31)
    Feb 1 Cash $12400
    Note ...

    Solution Summary

    Notes receivable in Gonzalez Company's December trial balance are examined.