Cornerstone Exercise 5-35 (Algorithmic)

Notes Receivable

Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 6% interest on February 1, 2019.

Required:

1. 1.Prepare the journal entry to record the sale on February 1, 2019

Record sale

2.Determine how much interest Link will receive if the note is repaid on December 1, 2019. Round your answer to the nearest whole dollar.

$

3.Prepare Link's journal entry to record the cash received to pay off the note and interest on December 1, 2019. If an amount box does not require an entry, leave it blank.

Record collection of note