P9-31A Accounting for notes receivable and accruing interest

Kelly Realty loaned money and received the following notes during 2014.

Note Date Principal Amount Interest Rate Term

(1) Aug.1 $ 24,000 17% 1 year

(2) Nov. 30 18,000 6% 6 months

(3) Dec. 19 12,000 12% 30 days

Requirements

1. Determine the maturity date and maturity value of each note.

2. Journalize the entry to record the inception of each of the three notes and also

journalize a single adjusting entry at December 31, 2014, the fiscal year-end, to

record accrued interest revenue on all three notes. Explanations are not required.

3. Journalize the collection of principal and interest at maturity of all three notes.

Explanations are not required.