P5-68A. (Learning Objective 4: Accounting for notes receivable and accrued interest revenue)

Healthy Meal completed the following selected transactions.

Requirements 1. Record the transactions in Healthy Meal’s journal. Round interest amounts to the nearest dollar. Explanations are not required.
2. Show what Healthy Meal will report on its comparative classified Balance Sheet at December 31, 20X7, and December 31, 20X6.

Transcribed Image Text:

20X6 Oct. 31 Dec. 31 20X7 Jan. 31 Feb. 18 19 Nov. 11 Dec. 31 Sold goods to Buy Low Foods, receiving a $36,000, three-month, 6.50% note. Made an adjusting entry to accrue interest on the Buy Low Foods note. Collected the Buy Low Foods note. Received a 90-day, 8.25%, $7,400 note from Dutton Market on account. Sold the Dutton Market note to Amherst Bank, receiving cash of $7,300. (Debit the difference to financing expense.) Lent $16,400 cash to Street Provisions, receiving a 90-day, 9.50% note. Accrued the interest on the Street Provisions note.