Notes Receivable and Interest

Lous Hardware Store has a fiscal year end of December 31.

October 20, 2010 Lous Hardware Store sells inventory to Modern Home Builders and accepts a note receivable for the price of $30,000, 8% for 120 days. The inventory had a cost of $18,500.

December 31, 2010 Lous Hardware Store creates an adjusting entry to accrue the interest on the Modern Home Builders note receivable.

Maturity Date, 2011 Lous Hardware Store collects the amount owing from Modern Home Builders.

1. Calculate the maturity date for the note receivable and create the journal entries for the transactions listed above.

General Journal

Date	Accounts	Debit	Credit