On November 1, 2014, Yellow Grove Co. sold $45,000 of goods and accepted a note bearing 8% interest. The note was due in one year.
Required:
a. Prepare the journal entry to accrue interest for December 31, 2014.
b. Record the collection of the note on October 31, 2015, assuming the accrual entry above was reversed on January 1, 2015

Question

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The Answer of On November 1, 2014, Yellow Grove Co. sold $45,000 of goods and accepted a note bearing 8% interest. The note was due in one year.
Required:
a. Prepare the journal entry to accrue interest for December 31, 2014.
b. Record the collection of the note on October 31, 2015, assuming the accrual entry above was reversed on January 1, 2015