Part B- Notes Receivable-

1. Jan 1 Loaned $40,000 to the company's general manager, who signed a 6-month, 7% note due June 30.
2. Feb 1 a customer who owed $6,500 settled his account by signing a 3-month, 3% note.
3. Mar 31 Recorded accrued interest on all notes in preparation for issue of quarterly financial statements.
4. Apr 30 The customer from February 1 defaulted on the note. It is unlikely that he will be able to pay the account.