Question

2016

Dec.		16		Accepted a $13,400, 60-day, 7% 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) $6,700, 7%, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co.
		17		Accepted a(n) $2,400, 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 7%.
Aug.		7		Accepted a(n) $7,200, 90-day, 11% note dated this day in granting a time extension on the past-due account receivable of Mulan Co.
Sep.		3		Accepted a(n) $2,230, 60-day, 10% 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

Answer 1-a.
	Danny Todd - Dec 16, 2017
Principal	13,400.00
Rate	7%
Time	15 Days
Total Interest	39.08
Assuming 360 Days in a year

Answer 1-b.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
16-Dec-16	Notes Receivable - Danny Todd	13,400.00
	Accounts Receivable - Danny Todd		13,400.00
	(record the note received against balance)
31-Dec-16	Interest Receivable	39.08
	Interest Revenue		39.08
	(record the interest accrued)

Answer 1-c.
	Danny Todd - Dec 16, 2017	Midnight Co. - Mar 2, 2017	Ava Pivet - Mar 2, 2017	Midnight Co. - May 31, 2017	Mulan Co. - Aug 7, 2017	Noah Carson - Sep 3, 2017
Principal	13,400.00	6,700.00	2,400.00	6,817.25	7,200.00	2,230.00
Rate	7%	7%	7%	7%	11%	10%
Time	45 Days	90 Days	30 Days	46 Days	90 Days	60 Days
Total Interest	117.25	117.25	14.00	60.98	198.00	37.17

Answer 1-d.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
14-Feb-17	Cash	13,556.33
	Notes Receivable - Danny Todd		13,400.00
	Interest Receivable		39.08
	Interest Revenue		117.25
	(Record the cash received)
2-Mar-17	Notes Receivable - Midnight Co	6,700.00
	Accounts Receivable - Midnight Co		6,700.00
	(record the note received against balance)
2-Mar-17	Notes Receivable - Ava Pivet	2,400.00
	Accounts Receivable - Ava Pivet		2,400.00
	(record the note received against balance)
16-Apr-17	Accounts Receivable - Ava Pivet	2,414.00
	Notes Receivable - Ava Pivet		2,400.00
	Interest Revenue		14.00
	(record the note dishonoured)
31-May	Accounts Receivable - Midnight Co	6,817.25
	Notes Receivable - Midnight Co		6,700.00
	Interest Revenue		117.25
	(record the note dishonoured)
16-Jul-17	Cash	6,878.23
	Accounts Receivable - Midnight Co		6,817.25
	Interest Revenue		60.98
	(Record the cash received)
7-Aug-17	Notes Receivable - Mulan Co	7,200.00
	Accounts Receivable - Mulan Co		7,200.00
	(record the note received against balance)
3-Sep-17	Notes Receivable - Noah Carson	2,230.00
	Accounts Receivable - Noah Carson		2,230.00
	(record the note received against balance)
2-Nov-17	Cash	2,267.17
	Notes Receivable - Noah Carson		2,230.00
	Interest Revenue		37.17
	(Record the cash received)
5-Nov-17	Cash	7,398.00
	Notes Receivable - Mulan Co		7,200.00
	Interest Revenue		198.00
	(Record the cash received)
1-Dec-17	Allowance for Doubtful Account	2,414.00
	Accounts Receivable - Ava Pivet		2,414.00
	(record the amount written off)