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20 June, 17:32

Samberg Inc. had the following transactions. Oct. 1 - Sold $11,500 of merchandise on account, 1/10, n/30 to McCormick Industries. Nov. 1 - Received a $11,500, 90-day, 11% note from McCormick Industries to settle its $11,500 unpaid balance. Dec. 31 - Accrued interest on the note. (Round your answer to the nearest whole dollar amount.) Jan. 31 - Received the interest on the note's maturity date. Jan. 31 - Received the principal on the note's maturity date. (Round your answer to the nearest whole dollar amount.) Required: Prepare the required journal entries.

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  1. 20 June, 17:47
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    Below are the Journal Entries for Samberg Inc.

    Explanation:

    Date Oct 1

    Debit: Accounts Receivables $11,500

    Credit: Sales Revenue $11,500

    To record merchandise sold on account 1/10, n/30.

    Date Nov 1

    Debit: Notes Receivables $11,500

    Credit: Accounts Receivables $11,500

    To record Notes Receivables.

    Date Dec 31

    Debit: Interest Receivables $316

    Credit: Interest Revenue $316

    To record Accrued Interest.

    Interest = Principal x Interest Rate x (No. of Days / Total Days in a Year)

    Interest = $11,500 x 11% x (90 / 360)

    Interest = $316

    Date Jan 31

    Debit: Cash $11,816

    Credit: Notes Receivables $11,500

    Interest Receivables $316

    To record Cash Received on maturity date with Interest.
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