P7-9 (Notes Receivable Journal Entries)

On December 31, 2014, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $126,796, accepting $49,700 down and agreeing to accept the balance in four equal installments of $24,850 receivable each December 31. An assumed interest rate of 11% is imputed.

(a) Prepare the entries that would be recorded by Oakbrook Inc. for the sale on December 31, 2014. (Assume that the effective-interest method is used for amortization purposes.)

(b)Prepare the entries that would be recorded by Oakbrook Inc. for the (a) receipts and (b) interest on December 31, 2015. (Assume that the effective-interest method is used for amortization purposes.)

(c)Prepare the entries that would be recorded by Oakbrook Inc. for the (a) receipts and (b) interest on December 31, 2016. (Assume that the effective-interest method is used for amortization purposes.)

(d)Prepare the entries that would be recorded by Oakbrook Inc. for the (a) receipts and (b) interest on December 31, 2017. (Assume that the effective-interest method is used for amortization purposes.)

(e)Prepare the entries that would be recorded by Oakbrook Inc. for the (a) receipts and (b) interest on December 31, 2018. (Assume that the effective-interest method is used for amortization purposes.)