Valley spa purchased $9,900 in plumbing components from tubman co. valley spa signed a 60-day, 8% promissory note for $9,900. if the note is dishonored, but tubman intends to continue collection efforts, what is the journal entry to record the dishonored note? (use 360 days a year.)

Tubman Co

Journal Entry

Sr. No Particulars Debit Credit

1. Accounts Receivable - Valley Spa $ 10032

Interest Revenue $ 132

Notes Receivable $ 9,900

To charge account of Valley Spa for a dishonored note and interest of

$ 9,900 * 8% * 60/360 = $ 132

The entry records the full amount, including interest, to ensure that it is included in the collection efforts.

Restoring the account also reminds the company to continue collection efforts for both principal and interest.