In general journal form, prepare journal entries for the following transactions.
ID: 2512091 • 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
Answer:
Date
General Journal
Debit $
Credit $
13-Dec
Notes receivable
9500
Account receivable
9500
31-Dec
Accrued interest
38
Interest income
38
(9500*8%*18/360)
(to record the accrues interest)
27-Jan
Cash
9595
Notes receivable
9500
Accrued interest
38
Interest income (9500*8%*27/360)
57
(to record the collection)
3-Mar
Notes receivable
5000
account receivable
5000
17-Mar
Notes receivable
2000
Account receivable
2000
(to record the acceptance of note)
16-Apr
Account receivable
2000
Notes receivable
2000
(to record the dishonor of note)
16-Apr
Accrued interest
15
Interest income
15
(2000*9%*30/360)
1-May
Allowance for doubtful account
2000
Account receivable
2000
(to record the write off of HC account)
1-Jun
Cash
5125
Notes receivable
5000
Interest income (5000*10%*90/360)
125
(to record the collection)
Date
General Journal
Debit $
Credit $
13-Dec
Notes receivable
9500
Account receivable
9500
31-Dec
Accrued interest
38
Interest income
38
(9500*8%*18/360)
(to record the accrues interest)
27-Jan
Cash
9595
Notes receivable
9500
Accrued interest
38
Interest income (9500*8%*27/360)
57
(to record the collection)
3-Mar
Notes receivable
5000
account receivable
5000
17-Mar
Notes receivable
2000
Account receivable
2000
(to record the acceptance of note)
16-Apr
Account receivable
2000
Notes receivable
2000
(to record the dishonor of note)
16-Apr
Accrued interest
15
Interest income
15
(2000*9%*30/360)
1-May
Allowance for doubtful account
2000
Account receivable
2000
(to record the write off of HC account)
1-Jun
Cash
5125
Notes receivable
5000
Interest income (5000*10%*90/360)
125
(to record the collection)