illustration entries for notes receivable

Notes Receivable
Illustrative Entries

6-1-X1	Notes Receivable		10,000
	Accounts Receivable			10,000
	To record conversion of an account receivable to a note receivable

9-1-X1	Cash		10,300
	Interest Income			300
	Notes Receivable			10,000
	To record collection of note receivable plus accrued interest of $300 ($10,000 X 12% X 90/360)

or, if dishonored:

9-1-X1	Accounts Receivable		10,300
	Interest Income			300
	Notes Receivable			10,000
	To record dishonor of note receivable plus accrued interest of $300 ($10,000 X 12% X 90/360)