Problem 8-8A (Part Level Submission) Tardif Corporation adjusts its books monthl
ID: 2551387 • Letter: P
Question
Problem 8-8A (Part Level Submission) Tardif Corporation adjusts its books monthly. On September 30, 2015, notes receivable include the following: Issue Date Maker Principal Interest Term Mar. 31, 2015 RES Inc May 31, 2015 Ihara Ltd. Aug. 31, 2015 Dragon Limited 6,000 6% 2months Sept. 30, 2015 MGH Corp $16,200 6% 7months 18,800 5% 18months 21,100 4% 16months 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 Octobes, the following selected transactions were completed Oct.1 Received the interest due from thara and MGH 1Received 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 Shara and MGH notes 31 Analyzed the remaining notes for collectibility. Estimated that $18,800 of notes may not be collectible in the future because of significant labour issues currently being experienced by hara.Explanation / Answer
journal entries
date
explanation
debit
credit
1-Oct
cash
148
interest receivable
148
31-Oct
accounts receivables
6000
interest receivables
40
notes receivables
6000
interest revenue
40
31-Oct
cash
16767
notes receivables
16200
interest revenue
567
31-Oct
interest receivable
148
interest revenue
148
31-Oct
bad debts
6040
allowance for doubtful notes
6040
interest on ihara ltd
18800*5%*1/12
78
interest on mgh notes
21000*4%*1/12
70
total interest due
148
journal entries
date
explanation
debit
credit
1-Oct
cash
148
interest receivable
148
31-Oct
accounts receivables
6000
interest receivables
40
notes receivables
6000
interest revenue
40
31-Oct
cash
16767
notes receivables
16200
interest revenue
567
31-Oct
interest receivable
148
interest revenue
148
31-Oct
bad debts
6040
allowance for doubtful notes
6040
interest on ihara ltd
18800*5%*1/12
78
interest on mgh notes
21000*4%*1/12
70
total interest due
148