Question

The following selected transactions are from Carter Company.

Year 1

Dec.		16			Accepted a $19,200, 60-day, 10% note in granting Robert King a time extension on his past-due account receivable.
		31			Made an adjusting entry to record the accrued interest on the King note.

Year 2

Feb.		14			Received King’s payment of principal and interest on the note dated December 16.
Mar.		2			Accepted a $10,000, 10%, 90-day note in granting a time extension on the past-due account receivable from Nguyen Co.
		17			Accepted a $13,800, 30-day, 10% note in granting Edward Lee a time extension on her past-due account receivable.
Apr.		16			Lee dishonored her note.
May		31			Nguyen Co. dishonored its note.
Aug.		7			Accepted a $16,000, 90-day, 12% note in granting a time extension on the past-due account receivable of Walker Co.
Sep.		3			Accepted a $9,000, 60-day, 10% note in granting Rita Griffin a time extension on his past-due account receivable.
Nov.		2			Received payment of principal plus interest from Griffin for the September 3 note.
Nov.		5			Received payment of principal plus interest from Walker for the August 7 note.
Dec.		1			Wrote off the Lee account against the Allowance for Doubtful Accounts.

Feb. 14 Received King's payment of principal and interest on the $19,200, 60-day, 10% note dated December 16. The Carter Company does not prepare reversing entries. Verify the amount of interest using the "CALCULATION OF INTEREST" tab.

Answer 1

Please find attached journal entries for said transactions with appropriate explanations for interest computation: