Chapter 1 Problem 6-18
March 14 Accounts receivable 2,050,000
Sales 2,050,000
April 7 Notes receivable 2,000,000
Freight out 50,000
Accounts receivable 2,050,000
April 20 Cash 2,001,750
Notes receivable discounted 2,000,000
Interest income 1,750
80
Principal 2,000,000
Add: Interest (2,000,000 x 12% x 60/360) 40,000
Maturity value 2,040,000
Less: Discount (2,040,000 x 15% x 45/360) 38,250
Net proceeds 2,001,750
June 4 Accounts receivable (2,040,000 + 10,000) 2,050,000
Cash 2,050,000
Notes receivable discounted 2,000,000
Notes receivable 2,000,000
July 4 Cash 2,070,000
Accounts receivable 2,050,000
Interest income (2,000,000 x 12% x 30/360 20,000
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