Following are selected transactions for Vitalo Company.

Nov. 1 Accepted a $3,000, 180-day, 7% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.

Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note.

Apr. 30 White honored her note when presented for payment; February has 28 days for the current year.

Required:

Complete the table to calculate the interest amounts at December 31st and April 30th and use those calculated values to prepare your journal entries.

Vitalo Company

Journal Entries

Nov. 1 Notes Receivable $ 3000 Dr.

Accounts Receivable $ 3000 Cr.

Accepted a $3,000, 180-day, 7% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.

Dec. 31 Interest Receivable $ 35 Dr.

Interest Income $ 35 Cr.

($ 3000 * 7% * 180/360 = $ 3000*7% * 0.5 = $ 105) At Dec this amount would be

($ 105 / 6) * 2 = $35

Adjusted the year-end accounts for the accrued interest earned on the White note.

Apr. 30 Cash $ 3105

Notes Receivable $ 3000

Interest Receivable $ 105

White honored her note when presented for payment; February has 28 days for the current year.