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

Date	General Journal	Debit $	Credit $
13-Dec	Notes receivable	9500
	Account receivable		9500
31-Dec	Accrued interest	38
	Interest income		38
	(9500*8%*18/360)
	(to record the accrues interest)
27-Jan	Cash	9595
	Notes receivable		9500
	Accrued interest		38
	Interest income (9500*8%*27/360)		57
	(to record the collection)
3-Mar	Notes receivable	5000
	account receivable		5000
17-Mar	Notes receivable	2000
	Account receivable		2000
	(to record the acceptance of note)
16-Apr	Account receivable	2000
	Notes receivable		2000
	(to record the dishonor of note)
16-Apr	Accrued interest	15
	Interest income		15
	(2000*9%*30/360)
1-May	Allowance for doubtful account	2000
	Account receivable		2000
	(to record the write off of HC account)
1-Jun	Cash	5125
	Notes receivable		5000
	Interest income (5000*10%*90/360)		125
	(to record the collection)