JournaldrillAccepting a customer note
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Fernway Garden Center agrees to let a customer, Holt Landscaping, settle its overdue $4,800 account by signing a 90-day, 9% note receivable for the same amount.
What this exercise teaches
The $4,800 open account becomes a $4,800 note. Interest of $4,800 x 9% x 90/360 = $108 will be earned over the note's term, not on the day it is accepted.
A hint if you get stuck
One receivable is exchanged for another; no cash or interest is recorded today.
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