I am in totally agreement wth you T&P!! Thanks! I pretty much had it to the same affect...but this is what the answer is that we were given...

Ex. 11–2
a.
1.Merchandise Inventory 196,000 (debit)
Interest Expense 4,000 (debit)
Notes Payable 200,000 (credit)


2.Notes Payable 200,000 (debit)
Cash 200,000 (credit)


b.
1.Notes Receivable 200,000 (debit)
Sales 196,000 (credit)
Interest Revenue 4,000 (credit)

2.Cash 200,000 (debit)
Notes Receivable 200,000 (credit)


The 196,000 instead of the 184,000 is because it is pro-rated 200,000 x .08 x (90/360) Don't ask me where the 360 instead of 365 comes from...another accounting phenomenom! lol I was so confused b/c my teacher has stuff backwards it looks like. The company who issued the note should have a accts. receivable, not payable! What a goofy professory I have

Thanks a million though! And thanks for the T account refresher! I remember that from Acc 1 and it is a big help!!! This is slowly starting to make some sort of sense to me