Accounting for Notes Receivable

Sloan Systems sells voice mail systems to small businesses. Sloan engaged in the following activities involving notes receivable (round to nearest dollar):

On October 1, 2013, Sloan sold an $8,000 system to Majors Company. Majors gave Sloan a 7-month, 10% note as payment. On November 1, 2013, Sloan sold a $6,000 system to Hadley Inc. Hadley gave Sloan a 10-month, 12% note as payment. On May 1, 2014, Majors paid the amount due on its note. On September 1, 2014, Hadley paid the amount due on its note.

Required:

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Prepare the necessary journal and adjusting entries for Sloan Systems to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Note from Majors Company:

Account and Explanation

Debit

Credit

2013 Oct. 1

Record sale

2013 Dec. 31

Record accrued interest income

2014 May. 1

Record collection of note receivable

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Note from Hadley Inc.:

For a compound transaction, if an amount box does not require an entry, leave it blank.

Account and Explanation

Debit

Credit

2013 Nov. 1

Record sale

2013 Dec. 31

Record accrued interest income

2014 Sept. 1

Record collection of note receivable