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Grove Refrigeration Ltd. sold $10,000 of goods to Redlac Pump Services Inc. on January 28, 2016. The account receivable was converted to a note receivable on August 1, 2016. Redlac agreed to pay Grove $1,000 per month plus accrued interest on the outstanding balance on the last day of each month.
Required:
- Prepare the entry needed to record the note receivable in Grove’s accounting records on August 1, 2016.
- Record the cash received from the note in Grove’s accounting records on August 31, 2016.
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