Problem 8-8A, how do I solve this? I\'m having trouble with the interest. Proble
ID: 2551095 • Letter: P
Question
Problem 8-8A, how do I solve this? I'm having trouble with the interest.
Problem 9-8A (Part Level Submission) Tardif Corporation adjusts its books monthly. On September 30, 2015, notes receivable include the following Maker Principal Interest Term $18,200 5% Issue Date Mar. 31, 2015 RES Inc. May 31, 2015 Ihara Ltd Aug. 31, 2015 Dragon Limited Gept. 30, 2015 MGH CorP 7 months 17,400 18 months 2 months 19,800 4% 16months 4,600 9% Interest is due at maturity for the RES and Dragon notes. Interest is due on the first day of the month for the Ihara and MGH notes. At September 30, the balance in the Allowance for Doubtful Notes account is nil. In October, the following selected transactions were completed. Oct. 1 Received the interest due from thara and MGH 31 Received notice that Dragon was unable to pay its note as scheduled. It expects to be able to pay in the future. 31 The RES note matured and was received in full 31 ACCrued interest on the Ihara and MGH notes. 31 Analyzed the remaining notes for collectibility, Estimated that $17,400 of notes may not be collectible in the future because of significant labour issues currently being experienced by Ihara. Your answer is partially correct. Try again. Calculate the balance in the Interest Receivable and Notes Receivable accounts at September 30, 2015. (Round answers to o decimal places, e.g. 5,275.) Balance in the Interest Receivable 490 8alance in the Notes Receivable 60000Explanation / Answer
(A) Notes Receivable up to 30 Sept. = 18200 + 17400 + 4600 + 19800 = 60000
Interest Receivable up to 30 Sept.
RES = 18200 x 5% x 6/12 = 455
Ihara = 17400 x 6% x 1/12 = 87
Dragon = 4600 x 9% x 1/12 = 34.50 = 35
MGH = 19800 x 4% x 1/12 = 66
Total Interest Receivable up to 30 Sept = 455 + 87+ 35+ 66 = $643
Answer 2
Interest due to MGH & Ihara up to 30 Sept = 87+66 = $153
Oct 1 Debit Cash A/c 153
Credit Interest Receivable 153
For Dragon Note
Total Amount Due to dragon on Oct 31 = 4600 + (4600 x 9% x 2/12) = 4600 + 69 = 4669
Oct 31 Debit A/c Receivable 4669
Credit Notes Receivable 4600
Credit Interest Receivable 69
For RES Note matured
Interest on RES Notes = 18200 x 5% x 7/12 = 530.83 = $531
Oct 31 Debit Cash 18731
Credit Notes Receivable 18200
Credit Interest Receivable 531
For Accrued interest on Ihara & MGH
Accrued Interes on Ihara & MGH for one month = 87 + 66 = $153
Oct 31 Debit Interest Receivable 153
Credit Interest Revenue 153
For uncollictibility of Ihara note
Oct 31 Debit Uncollectible Notes Expenses 17400
Credit Allowance for Doubt full A/cs 17400
So above is the solution