On September 1, Tacht Company lent $ 82,000 to L. Kalra on a 90-day, 2 % note.

1. Journalize for Tacht Company the lending of the money on September 1.

2. Journalize the collection of the principal and interest at maturity. Specify the date. Round interest to the nearest dollar.

Answer and Explanation:

The journal entries are shown below:

On Sep 1

Note receivable Dr $82,000

To Cash $82,000

(Being the lending of the money is recorded)

On Sep 1 to 90 days it is December 1

29 days in September + 31 days in October + 30 days in November

On December 1

Cash $82,410

To Interest revenue $410

To Note receivable $82,000

(Being the collection of the principal and interest at maturity is recorded)

The computation is shown below:

= $82,000 * 2% * 90 days : 360 days

= $410