Accepted a $17,000, 45-day, 8% note dated December 13 in granting Miranda Lee a
ID: 2484647 • Letter: A
Question
Accepted a $17,000, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable.
Prepared an adjusting entry to record the accrued interest on the Lee note.
First, complete the table below to calculate the interest amounts at December 31st. (Do not round intermediate calculations. Use 360 days a year.)
Use the calculated value to prepare your journal entries.
1.
Record acceptance of a $17,000, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable.
2.
Prepare an adjusting entry to record the accrued interest on the Lee note.
Following are selected transactions Danica Company for 2014.Explanation / Answer
Dec-13 Note Receivable 17000 A/R 17000 Dec-31 Accrued Interest 68 Interest Income 68 Total Through Maturity Interest Recognized 01/12/1931 Principal 17000 Rate (%) 8% Time 45 days 18 days Total interest 170 68