Question

The following selected transactions are from Ohm Company. (Use 360 days a year.) 2016 Dec. 16 Accepted a $14,500, 60-day, 6% 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) $7,700, 6%, 90-day note dated this day in granting a time extension on the past due account receivable from Midnight co. 17 Accepted a(n) $2,300, 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 the dishonored note plus accrued interest to Midnight Co.'s accounts receivable. July 16 Received payment from Midnight Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at 6x Aug. 7 Accepted a(n) 59,000, 90-day, 12% note dated this day in granting a time extension on the past-due account receivable of Mulan Co. Sep. 3 Accepted a(n) 3,130, 60-day, 9 note dated this day in granting Noah Carson a time extension on his past-due 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 transactions

Answer 1

D.Todd note-December 16,2012
		total	interest
		through	recognized
		maturity	31-Dec
Principal		14,500	14,500
Rate(%)		6%	6%
time		60/360	15/360
total interest		145	36
Date	General journal				Debit	credit
2016
16-Dec	Note receivable				14,500
	Account receivable					14,500
31-Dec	interest receivable				36
	interest revenue					36
		Midnight	privet	Mulan	midnight	carson
		2-Mar	17-Mar	7-Aug	31-May	3-Sep
		2018	2018	2018	2018	2018
Principal		7,700	2,300	9,000	7,816	3,130
Rate(%)		6%	7%	12%	6%	9%
time		90/360	30/360	90/360	46/360	60/360
total interest		116	13	270	60	47

Date	General journal				Debit	credit
2017
14-Feb	Cash				14645
	interest revenue					109
	Note receivable-T Todd					14,500
	interest receivable					36
2-Mar	Note receivable				7,700
	Account receivable-Midnight co					7,700
17-Mar	Note receivable				2,300
	Account receivable-Privet					2,300
16-Apr	Account receivable-privet				2,313
	note receivable					2,300
	interest revenue					13
31-May	Account receivable-Midnight				7,816
	note receivable					7,700
	interest revenue					116
16-Jul	Cash				7,875
	Account receivable-Midnight					7,816
	interest revenue					60
7-Aug	Note receivable				9,000
	account receivable-Mulan Co					9,000
3-Sep	Note receivable				3,130
	account receivable-Carson					3,130
2-Nov	cash				3,177
	note receivable					3,130
	interest revenue					47
5-Nov	cash				9,270
	note receivable					9,000
	interest revenue					270
1-Dec	Allowance for Doubtful accounts				2,313
	Account receivable-privet					2,313