On march 1, terrell & associates provides legal services to whole grain bakery regarding somerecent food poisoning complaints. legal services total $11,000. in payment for the services, wholegrain bakery signs a 9% note requiring the payment of the face amount and interest to terrell & associates on september 1.

required:
for terrell & associates, record the acceptance of the note receivable on march 1 and the cashcollection on september 1.

The Journal entries are as follows:

(i) On march 01,

Legal service expenses a/c  Dr. $11,000

To notes payable A/c                                $11,000

(To record the acceptance of the note receivable)

(ii) On September 1,

Notes payable a/c     Dr. $11,000

Interest expense a/c Dr. $495

To cash a/c                                    $11,495

(To record the cash collection)

Workings:

Interest expense = 11,000 × 9% × (6 ÷ 12)

                            = $495

answer; ///after donning a gown, mask and eyewear;

answer assertive;