Prepare Journal Entries to Record the Following Transactions Entered into by Valente

question 203

Essay

Prepare journal entries to record the following transactions entered into by Valente Company:
2016
June 1 Received a $10000 12% 1-year note from Andrea Foley as full payment on her account.
Nov. 1 Sold merchandise on account to Patton Inc. for $12000 terms 2/10 n/30.
Nov. 5 Patton Inc. returned merchandise worth $500.
Nov. 9 Received payment in full from Patton Inc.
Dec. 31 Accrued interest on Foley's note.
2017
June 1 Andrea Foley honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2017.

---

Definitions:

Usury Law

Regulations governing the maximum interest rates that can be charged on loans, aimed at preventing lending practices deemed exploitative.

Market Rate

The prevailing price or interest rate at which goods, services, or securities are traded in a competitive marketplace.

Shortage

A situation where the demand for a product or service exceeds the supply available at a specified price.

Usury Law

Legislation that sets maximum interest rates that can be charged on loans, to prevent excessive interest.