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Walleye Company Requirement: Prepare Journal Entries Debit Credit

Walleye Company sold $500,000 of notes receivable on January 1st and recorded the transaction by debiting notes receivable and crediting sales. On March 1st, the notes were collected for $503,500 cash, with $6,500 recorded as a loss on notes discounting to account for the difference between the maturity value and net proceeds. Journal entries were made to record the principal amount received, interest income earned, and discount on early payment of the notes.

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847 views

Walleye Company Requirement: Prepare Journal Entries Debit Credit

Walleye Company sold $500,000 of notes receivable on January 1st and recorded the transaction by debiting notes receivable and crediting sales. On March 1st, the notes were collected for $503,500 cash, with $6,500 recorded as a loss on notes discounting to account for the difference between the maturity value and net proceeds. Journal entries were made to record the principal amount received, interest income earned, and discount on early payment of the notes.

Uploaded by

Anonn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Walleye Company

Requirement: Prepare journal entries Debit Credit

Jan-01 Notes receivable 500,000


Sales 500,000

Mar-01 Cash 503,500


Loss on notes discounting 6,500
Notes receivable 500,000
Interest income 10,000

Principal 500,000
Interest (500k*12%*6/12) 30,000
Maturity value 530,000
Discount(530,000*15%*4/12) 26,500
Net proceeds 503,500

Principal 500,000
Accrued interest receivable (500,000*12%*2/12) 10,000
Carrying amount of notes receivable 510,000

Net proceeds 503,500


Less: Carrying amount of Notes receivable 510,000
Loss on notes discounting 6,500

Jul-01 No entry

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