In general journal form, prepare journal entries for the following transactions.
ID: 2511692 • Letter: I
Question
In general journal form, prepare journal entries for the following transactions.
Dec. 13 Accepted a $9,500 45-day, 8% note date December 13th in granting Miranda Lee a time extension on her past-due account receivable.
Dec. 31 Prepare an adjusting entry to record the accrued interest on the Lee note.
Jan. 27 Received Lee's payment for principal and interest on the note dated December 13.
Mar. 3 Accepted a $5,000, 90-day, 10% note date March 3rd in granting Thomas Company a time extension on his past-due account receivable.
Mar. 17 Accepted a $2,000, 30-day, 9% note date March 17th in granting Hiroshi Cheng a time extension on his past-due account receivable.
April 16 Cheng dishonors his note when presented for payment.
May 1 Wrote off the Cheng account against the Allowance for Doubtful Accounts.
June 1 Received the Tomas payment for principal and interest on the note dated March 3rd.
Explanation / Answer
M.Lee Note total Amount interest through accrued at Recognized Maturity 31-Dec 27-Jan Principal 9,500 9,500 9,500 Rate(%) 8% 8% 8% time 45/360 18/360 27/360 total intt 95 38 57 Tomas co Note total through Maturity Principal 5,000 Rate(%) 10% time 90/360 total intt 125 H.Cheng note total through Maturity Principal 2,000 Rate(%) 9% time 30/360 total intt 15 Journal Entries Date General Journal Debit Credit 2016 13-Dec Note receivable 9,500 Accounts receivable 9,500 31-Dec interest receivable 38 interest income 38 2017 27-Jan Cash 9,595 interest receivable 38 interest income 57 Note receivable 9,500 3-Mar Note receivable 5,000 Account receivable-Tomas 5,000 17-Mar Note receivable 2,000 Account receivable-H.Cheng 2,000 16-Apr Account receivable-H.Cheng 2,015 interest income 15 note receivable 2,000 1-May Allowance for Doubtful Accounts 2,015 Accounts receivable-H.Cheng 2,015 1-Jun Cash 5,125 interest income 125 note receivable 5,000