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17 December, 13:45

Valley Spa purchased $8,000 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 12% promissory note for $8,000. 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.)

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  1. 17 December, 14:09
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    Answer:A/R, IR, NR

    Explanation: Journal entry to record Dishonored note are as follows

    A/R - Debit your Account Receivable for the total of principle and interest owned.

    IR - Credit the interest revenue account for the interest amount receivable.

    NR - Credit the notes receivable account for the principle balance.
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