The following selected transactions are from Ohlm Company. (Use 360 days a year.
ID: 2550129 • Letter: T
Question
The following selected transactions are from Ohlm Company. (Use 360 days a year.) 2016 Dec. 16 Accepted a $14,400, 60-day, 7% note dated this day in granting Danny Todd a time extension on his past-due account receivable. 31 Made an adjusting entry to record the accrued interest on the Todd note 2017 Feb. 14 Received Todd's payment of principal and interest on the note dated December 16 Mar. 2 Accepted a(n) $8,000, 78, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co. 17 Accepted a(n) $3,700, 30-day, 7% note dated this day in granting Ava Privet a time extension on her past-due account receivable. Apr. 16 Privet dishonored her note when presented for payment. May 31 Midnight Co. refused to pay the note that was due to Ohlm Co. on May 31. Prepare the journal entry to charge July 16 Received payment from Midnight Co. for the maturity value of its dishonored note plus interest for 46 days Aug. 7 Accepted a(n) $7,850, 90-day, 11% note dated this day in granting a time extension on the past-due account Sep. 3 Accepted a(n) $3,970, 60-day, 9% note dated this day in granting Noah Carson a time extension on his past-due dishonored note plus accrued interest to Midnight Co. 's accounts receivable. beyond maturity at 78. receivable of Mulan Co account receivable. Nov. 2 Received payment of principal plus interest from Carson for the September 3 note. Nov. 5 Received payment of principal plus interest from Mulan for the August 7 note. Dec. 1 Wrote off the Privet account against the Allowance for Doubtful Accounts. Required: 1-a. First, complete the table below to calculate the interest amount at December 31, 2016. 1-b. Use the calculated value to prepare your journal entries for 2016 transactions 1-c. First, complete the table below to calculate the interest amounts 1-d. Use those calculated values to prepare your journal entries for 2017 transactionsExplanation / Answer
1-a
First complete the table below to calculate the interest amount at december 31 2016
Total through Maturity
Interest recognized in December 31
Prinicipal
14400
14400
Rate
7%
7%
Time
60/360
15/360
Total interest
168
42
1-b
Use calculated value to prepare your journal entries
Date
General journal
Debit
credit
Dec-16
Notes receiveable -D.Todd
14400
Accounts receivable - D. Todd
14400
Dec-31
Interest receivable
42
Interest revenue
42
1-c
First complete the table to calculate interest amounts
Mid night co noteMarch 2
A. Pivet note MAR 17 2015
Mulan note AUG 7
Midnight co Note May 31
N carson note september 3
Principal
8000
3700
7850
8140
3970
Rate %
7%
7%
11%
7%
9%
Time
90/360
30/360
90/360
46/360
60/360
Total interest
140
22
216
73
60
1-d
Use calculated value to prepare your journal entries
Date
General journal
Debit
credit
Feb-14
Cash
14568
Interest revenue
126
Interest receivable
42
Notes receivable - D todd
14400
Mar-02
Notes receivable -Midnight co
8000
Accounts receivable -Midnight co
8000
Mar-17
Notes receivable -A Pivet
3700
Accounts receivable - A pivet
3700
Apr-16
Accounts receivable - A PIVET
3722
Interest revenue
22
Notes receivable - A pivet
3700
Jul-16
Accounts receivable - Midnight ci
8140
Interest revenue
140
Notes receivable - Midnight co
8000
Aug-07
Notes receivable - Mulan
7850
Accounts receivable - mulan
7850
Sep-03
Notes receivable - N carson
3970
Accounts receivable - N Carson
3970
Nov-02
cash
4030
Interest revenue
60
Notes receivable - N carson
3970
Nov-05
cash
8066
Interest revenue
216
Notes receivable - Mulan
7850
Dec-01
Allowance for doubtful accounts
3722
Accounts receivable - A Pivet
3722
1-a
First complete the table below to calculate the interest amount at december 31 2016
Total through Maturity
Interest recognized in December 31
Prinicipal
14400
14400
Rate
7%
7%
Time
60/360
15/360
Total interest
168
42
1-b
Use calculated value to prepare your journal entries