Activity

Notes Receivable

Problem 6-1.
2021
Jan 1. Cash 1,000,000
Notes Receivable 6,000,000
Land 5,000,000
Gain on sale of land 2,000,000

Dec. 31 Accrued Interest Receivable 720,000

Interest Income (12% x 6,000,000) 720,000

2022
Dec. 31 Accrued Interest Receivable 806,400
Interest Income (12% x 6,720,000) 806,400

2023
Jan. 1 Cash 7,526,400
Notes Receivable 6,000,000
Accrued Interest Receivable 1,526,400

Problem 6-2.
Jan. 1 Notes Receivable 600,000
Sales 540,000
Unearned Interest Income 60,000
Dec. 31 Cash 200,000
Notes Receivable 200,000

31 Unearned Interest Income 30,000

Interest Income 30,000

Year Notes Receivable Fraction Interest Income

2021 600,000 6/12 30,000
2022 400,000 4/12 20,000
2023 200,000 2/12 10,000