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Assume that, instead of honouring the note at maturity, Macaron dishonours it. Prepare the necessary journal entry on Espresso's books at the maturity date, February
Assume that, instead of honouring the note at maturity, Macaron dishonours it. Prepare the necessary journal entry on Espresso's books at the maturity date, February 1, 2022, assuming that eventual collection of the note is (1) expected, and (2) not expected. Interest was last paid by Macaron on January 1. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No Date Account Titles and Explanation (1) Feb.1 Accounts Receivable 57152 Credit (To record dishonoured note; eventual collection expected) (2) Feb. 1 Bad Debts Expense 56776 Notes Receivable (To record dishonoured note; eventual collection not expected) On November 1, 2021. Espresso inc. accepted a three-month, 8\%, $56,400 note from Macaron Inc. in settlement of its account. Interest is due on the first day of each month, starting December 1. Both companies' year ends are December 31
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