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A $120,000 account receivable owing from Baron Cabinets Ltd. To Glimmer Enterprises was converted into a 12%, 12-month note receivable on August 1, 2015. Principal of $10,000 per month plus accrued interest on the outstanding balance was to be paid on the note on the last day of each month.
Required:
- Prepare the entry needed to record the note receivable in Glimmer’s accounting records on August 1.
- Prepare the entry needed to record accrued interest on the note receivable in Glimmer’s accounting records at December 31, 2015.
- Record the cash received from the note in Glimmer’s accounting records on February 28, 2016.
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