The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:
20Y3 Nov. 21. Received from McKenna Outer Wear Co., on account, a $72,000, 60-day, 9% note dated November 21 in settlement of a past due account.
Dec. 31. Recorded an adjusting entry for accrued interest on the note of November 21. 20Y4 Jan. 20. Received payment of note and interest from McKenna Outer Wear Co.
Journalize the entries to record the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

Solution and Explanation:

The following journal entries will be passed in the book sof fasteners Inc., Co., which is a supplier of buttons and zippers for clothing

Date        Accounts Titles and Explanation  Post Ref    Debit  Credit

1 Nov-21  Notes receivable                                      $ 72,000  

      Accounts receivable-McKenna Outer Wear Co.        $ 72,000

2  Dec-31  Interest receivable    $720  

 Interest revenue                                                     $ 320

3  Jan-20  Cash                                           $ 73080  

 Interest revenue         $360

 Interest receivable                                          $720

 Notes receivable                                               $72,000

Note: the figures have been calculated and rounded off in the nearest dollar amount.