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On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $10,500. In payment for the services, Whole Grain Bakery signs a 8% note requiring the payment of the face amount and interest to Terrell & Associates on September 1. Required: For Terrell & Associates, record the acceptance of the note receivable on March 1 and the cash collection on September 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Answer:

Explanation:

The journal entries are shown below:

1. Notes receivable  A/c Dr

          To service revenue A/c

(Being the acceptance of the notes  receivable recorded)

2.  Cash A/c Dr $10,920

          To notes receivable A/c $10,500

          To Interest revenue A/c $420

(Being cash collection is recorded)

The interest revenue is computed below:

= Notes receivable × interest rate × (number of months ÷ total number of months in a year)

= $10,500 × 8% × (6 months ÷ 12 months)

= $420

The 6 month is calculated from the March 1 to September 1  

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The journal entries to record the acceptance of the note receivable on March 1 and the cash collection on September 1 are: Debit Notes receivable $10,500; Credit Service revenue $10,500.

Journal entries

Terrell & Associates journal entries

March 1

Debit Notes receivable $10,500

Credit Service revenue $10,500

September 1

Debit Cash$10,920

Credit Notes receivable $10,500

Credit Interest revenue $420

[$10,500 × 8% × (6 months ÷ 12 months)]

Inconclusion the journal entries to record the acceptance of the note receivable on March 1 and the cash collection on September 1 are: Debit Notes receivable $10,500; Credit Service revenue $10,500.

Learn more about journal entries here:https://brainly.com/question/14279491

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