July 12. Received a $240,000, 120-day, 7% note dated July 12 from Accolade Co. on account.
Nov. 9. The note is dishonored by Accolade Co.
Dec. 9. Received the amount due on the dishonored note plus interest for 30 days at 9% on the total amount charged to Accolade Co. on November 9.
Answer:
July 12 Notes Receivable 240,000
Accounts Receivable—Accolade Co. 240,000
Nov. 9 Accounts Receivable—Accolade Co. 245,600
Notes Receivable 240,000
Interest Revenue 5,600
($240,000 × 0.07 × 120/360).
Dec. 9 Cash 247,442
Accounts Receivable—Accolade Co. 245,600
Interest Revenue 1,842
($245,600 × 0.09 × 30/360).