Question

In general journal form, prepare journal entries for the following transactions.

Dec. 13 Accepted a $9,500 45-day, 8% note date December 13th in granting Miranda Lee a time extension on her past-due account receivable.

Dec. 31 Prepare an adjusting entry to record the accrued interest on the Lee note.

Jan. 27 Received Lee's payment for principal and interest on the note dated December 13.

Mar. 3 Accepted a $5,000, 90-day, 10% note date March 3rd in granting Thomas Company a time extension on his past-due account receivable.

Mar. 17 Accepted a $2,000, 30-day, 9% note date March 17th in granting Hiroshi Cheng a time extension on his past-due account receivable.

April 16 Cheng dishonors his note when presented for payment.

May 1 Wrote off the Cheng account against the Allowance for Doubtful Accounts.

June 1 Received the Tomas payment for principal and interest on the note dated March 3rd.

Answer 1

	M.Lee Note
		total	Amount	interest
		through	accrued at	Recognized
		Maturity	31-Dec	27-Jan
	Principal	9,500	9,500	9,500
	Rate(%)	8%	8%	8%
	time	45/360	18/360	27/360
	total intt	95	38	57
	Tomas co Note
		total
		through
		Maturity
	Principal	5,000
	Rate(%)	10%
	time	90/360
	total intt	125
	H.Cheng note
		total
		through
		Maturity
	Principal	2,000
	Rate(%)	9%
	time	30/360
	total intt	15
	Journal Entries
	Date	General Journal				Debit	Credit
	2016
	13-Dec	Note receivable				9,500
		Accounts receivable					9,500
	31-Dec	interest receivable				38
		interest income					38
	2017
	27-Jan	Cash				9,595
		interest receivable					38
		interest income					57
		Note receivable					9,500
	3-Mar	Note receivable				5,000
		Account receivable-Tomas					5,000
	17-Mar	Note receivable				2,000
		Account receivable-H.Cheng					2,000
	16-Apr	Account receivable-H.Cheng				2,015
		interest income					15
		note receivable					2,000
	1-May	Allowance for Doubtful Accounts				2,015
		Accounts receivable-H.Cheng					2,015
	1-Jun	Cash				5,125
		interest income					125
		note receivable					5,000