Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 21

Notes receivable-interest accrual and collection On April 1, 2016, Tabor Co. received an $18,000 note from a customer in settlement of an $18,000 account receivable from that customer. The note bore interest at the rate of 15% per annum, and the note plus interest was payable March 31, 2017.
Required:
Use the horizontal model to show the effects of each of these transactions and adjustments:
a. Receipt of the note on April 1, 2016.
b. The accrual of interest at December 31, 2016.
c. The collection of the note and interest on March 31, 2017.
(Note: As an alternative to using the horizontal model, write the journal entries to show each of these transactions and adjustments.)