Problem 8-8A (Part Level Submission) Tardif Corporation adjusts its books monthl
ID: 2552799 • 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 Mar. 31, 2015 RES Inc. May 31, 2015 Ihara Ltd. Aug. 31, 2015 Dragon Limited Sept. 30, 2015 MGH Corp. Principal Interest $15,400 6% 20,800 3% 5,300 5% 20,400 5% Term 7 months 18 months 2 months 16 months 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 31 31 31 31 Received the interest due from Ihara and MGH. Received notice that Dragon was unable to pay its note as scheduled. It expects to be able to pay in the future. The RES note matured and was received in full. Accrued interest on the Ihara and MGH notes. Analyzed the remaining notes for collectibility. Estimated that $20,800 of notes may not be collectible in the future because of significant labour issues currently being experienced by Ihara. v (a) 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 Balance in the Notes Receivables Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWERExplanation / Answer
a)
2)Note receivable = 15400+20800+5300+20400
=61900
Period of interest accrued Interest accrued RES Inc 6 months [31march 2015-30sep 2015] 15400*.06*6/12=462 Ihara Ltd 1 month [since interest is paid monthly] 20800*.03*1/12=52 Dragon limited 1 month [31aug- 30sep] 5300*.05*1/12=22 MGH corporation 1 month [since interest is paid monthly] 20400*.05*1/12=85 Interest receivable 621