Following are selected transactions for Ridge Company. Mar 21 Accepted a $9,500,
ID: 2474082 • Letter: F
Question
Following are selected transactions for Ridge Company. Mar 21 Accepted a $9,500, 180-day. 8% note dated March 21 from Tom Jackson in granting a time extension on his past-due account receivable. Sept 17 Jackson dishonors his note when it is presented for payment Dec. 31 11 After exhausting all legal means of collection. Ridge Company writes off Jackson's account against the Allowance for Doubtful Accounts. First complete the table below to calculate the interest amounts at September 17. (Use 360 days a year).Explanation / Answer
Total Principal $9,500 Rate(%) 8% Time 180/360 Total interest $380 Date Particulars Debit Credit March 21 Dr. Notes receivable - T. Jackson $9,500 Cr. Accounts receivable- T. Jackson $9,500 Sep 17 Dr. Accounts receivable- T. Jackson $9,880 Cr. Interest revenue $380 Cr. Notes receivable- T. Jackson $9,500 Dec 31 Dr. Allowance for doubtful accounts $9,880 Cr. Accounts receivable- T. Jackson $9,880