Neophyte Company

Required: Debit Credit

May-01 Notes receivable 200,000

Accounts receivable 200,000

Notes receivable 300,000

Accounts receivable 300,000

Jul-30 Accounts receivable 206,000

Notes receivable 200,000
Interest income (200,000*12%*90/360) 6,000

Aug-01 Cash 306,075

Loss on notes discounting 2,925
Notes receivable 300,000
Interest income 9,000

Principal 300,000
Interest (300k*12%*6/12) 18,000
Maturity value 318,000
Less: Discount (318,000*15%*3/12 11,925
Net proceeds 306,075

Principal 300,000
Interest (300k*12%*3/12) 9,000
Carrying amount of NR 309,000

Net proceeds 306,075

Less: Carrying amount of NR 309,000
Loss on discounting -2,925

Sep-01 Notes receivable 132,000

Accounts receivable 120,000
Interest income 12,000

28 Cash 210,120
Accounts receivable 206,000
Interest income (206k*12%*60/360) 4,120

Oct-01 Notes receivable 500,000

Sales 500,000
Nov-01 Accounts receivable (318k+12k) 330,000
Cash 330,000

Notes receivable discounted 300,000

Notes receivable 300,000

Dec-30 Cash 515,000

Notes receivable 500,000
Interest income (500k*12%*90/360) 15,000

31 Cash 336,600
Accounts receivable 330,000
Interest income (330k*12%*2/12) 66,000