Question

The following selected transactions are from Wright Company.

2016
Dec.		16			Accepted a $18,000, 60-day, 8% note dated this day in granting Melanie Duerr a time extension on his past-due account receivable.
		31			Made an adjusting entry to record the accrued interest on the Duerr note.

2017
Feb.		14			Received Duerr’s payment of principal and interest on the note dated December 16.
Mar.		2			Accepted a $9,000, 8%, 90-day note dated this day in granting a time extension on the past-due account receivable from Taylor Co.
		17			a $13,200, 30-day, 7% note dated this day in granting Paul Brown a time extension on her past-due account receivable.
Apr.		16			Brown dishonored her note when presented for payment.
May		31			Taylor Co. refused to pay the note that was due to Wright Co. on May 31. Prepare the journal entry to charge the dishonored note plus accrued interest to Taylor Co.’s accounts receivable.
July		16			Received payment from Taylor Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at 8%.
Aug.		7			Accepted a $14,000, 90-day, 6% note dated this day in granting a time extension on the past-due account receivable of Lauer Co.
Sep.		3			Accepted a $7,800, 60-day, 10% note dated this day in granting Debbie Hall a time extension on his past-due account receivable.
Nov.		2			Received payment of principal plus interest from Hall for the September 3 note.
Nov.		5			Received payment of principal plus interest from Lauer for the August 7 note.
Dec.		1			Wrote off the Brown account against the Allowance for Doubtful Accounts. General Journal tab - Prepare the 2017 journal entries related to the notes and accounts receivable of Wright Co. Calculation of interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries.  Verify that total interest revenue agrees with the trial balance.

Answer 1

Date	Accounts Title	Dr	Cr
16-Dec	Notes receivable	$18,000
	Accounts Receivable-Melanie Duerr		$18,000
31-Dec	Interest receivable	60
	Interest revenue (18000*8%*15/360)		$60
14-Feb	Cash	18240
	Interest receivable		60
	Notes receivable		18000
	Interest revenue (18000*8%*45/360)		180
2-Mar	Notes receivable	$9,000
	Accounts Receivable-Taylor		$9,000
17-Mar	Notes receivable	$13,200
	Accounts Receivable-Paul Brown		$13,200
16-Apr	Accounts Receivable-Paul Brown	13277
	Notes receivable		13200
	Interest revenue (13200*7%*30/360)		77
31-May	Accounts Receivable-Taylor	9180
	Notes receivable		9000
	Interest revenue (9000*8%*90/360)		180
16-Jul	Cash	9273.84
	Accounts Receivable-Tyalor		9180
	Interest revenue (9180*8%*46/360)		93.84
7-Aug	Notes receivable	$14,000
	Accounts Receivable-Lauer co		$14,000
3-Sep	Notes receivable	$7,800
	Accounts Receivable-Debbie Hall		$7,800
2-Nov	Cash	$7,930
	Notes receivable		$7,800
	Interest revenue (7800*10%*60/360)		130
5-Nov	Cash	$14,210
	Notes receivable		$14,000
	Interest revenue (14000*6%*90/360)		210
1-Dec	Allowance for Doubtful Debts	13277
	Accounts Receivable-Paul Brown		13277
	Total Interest
	Duerr- (18000*60/360*8%)	240
	Taylor (9000*8%*90/360)+93.84	274
	Lauer (14000*6%*90/360)	210
	Debbire (7800*60/360*10%)	130
	Brown	77
	Total interest revenue	931