Easter Supply sells a variety of merchandise to retail stores on account, but it insists that any customer who fails to pay an invoice when due must replace their accont receivable with an interest bearing nte. The company adjusts and closes its accounts at december 31. Among the transactions relating to notes receivables were the following. sept. 1 Receivable from a customer (Party Plus) a 9 month, 10 percent note for $75,000 in settlement of account receivable due today. june 1 Collected in full the 9 month, 10 percent note receivable from Party Plus, including interest. I need a. prepaqre a journal entries ( in general journal form) to record: (1) the receipt note on September1; (2) the adjustment for interest on December 31; and (3) collection of principla and interest on June 1. (To better illustrate the allocation of interest revenue between accounting periods, W will assume Easter Supply make ajusting entries only at year end.) b. Assume that instead of paying the same the note on June 1, the customer (Party Plus) had defaultedsufiented resources that the note eventually will be collected c. Explain why the companu insist that any customer who fails to pay invoice when due must replace it with an interest bearing note.
Easter Supply sells a variety of merchandise to retail stores on account, but it insists that any customer who fails to pay an invoice when due must replace their accont receivable with an interest bearing nte. The company adjusts and closes its accounts at december 31. Among the transactions relating to notes receivables were the following.
sept. 1 Receivable from a customer (Party Plus) a 9 month, 10 percent note for $75,000 in settlement of account receivable due today.
june 1 Collected in full the 9 month, 10 percent note receivable from Party Plus, including interest.
I need
a. prepaqre a
b. Assume that instead of paying the same the note on June 1, the customer (Party Plus) had defaultedsufiented resources that the note eventually will be collected
c. Explain why the companu insist that any customer who fails to pay invoice when due must replace it with an interest bearing note.
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