Ex.

189
Prepare the necessary journal entries for the following transactions for Presley Co.
May 25 Presley Co. received a $25,000, 2-month, 6% note from Durler Company in settlement
of an account receivable.
June 25 Presley Co. received payment on the Durler note.
Solution 189 (5 min.)
May 25 Notes Receivable .............................................................. 25,000
Accounts Receivable................................................ 25,0
00
June 25 Cash.................................................................................. 25,250
Notes Receivable ..................................................... 25,0
00
Interest Revenue ($25,000 × .06 × 2/12).................. 250

Ex. 190
Record the following transactions in general journal form for Klein Company.

July 1 Received a $10,000, 8%, 3-month note, dated July 1, from Ann Howe in payment of
her open account.

Oct. 1 Received notification from Ann Howe that she was unable to honor her note at this
time. It is expected that Howe will pay at a later date.

Nov. 15 Received full payment from Ann Howe for her note receivable previously dishonored.

Solution 190 (15 min.)

July 1 Notes Receivable................................................................. 10,000
Accounts Receivable— Ann Howe.............................. 10,0
00
(To record acceptance of Ann Howe note as
payment on account)

Oct. 1 Accounts Receivable—Ann Howe........................................ 10,200

Notes Receivable ........................................................ 10,0
00
Interest Revenue ($10,000 × 8% × 1/4) ..................... 200
(To record dishonored note, $10,000, plus interest)

Solution 190 (cont.)

Nov. 15 Cash .................................................................................... 10,200
Accounts Receivable—Ann Howe.............................. 10,200
(To record payment on account)