In: Accounting
GL0701 - Based on Problem 7-5A LO C2, C3, P4
The following selected transactions are from Hall Company.
Year 1
Dec. | 16 | Accepted a $13,200, 60-day, 12% note in granting Wang Lee a time extension on his past-due account receivable. | |||
31 | Made an adjusting entry to record the accrued interest on the Lee note. |
Year 2
Feb. | 14 | Received Lee’s payment of principal and interest on the note dated December 16. | |||
Mar. | 2 | Accepted a $10,000, 6%, 90-day note in granting a time extension on the past-due account receivable from Collins Co. | |||
17 | Accepted a $10,800, 30-day, 7% note in granting Kathy Perry a time extension on her past-due account receivable. | ||||
Apr. | 16 | Perry dishonored her note. | |||
May | 31 | Collins Co. dishonored its note. | |||
Aug. | 7 | Accepted a $20,000, 90-day, 6% note in granting a time extension on the past-due account receivable of Brown Co. | |||
Sep. | 3 | Accepted a $3,000, 60-day, 10% note in granting Hao Lee a time extension on his past-due account receivable. | |||
Nov. | 2 | Received payment of principal plus interest from Lee for the September 3 note. | |||
Nov. | 5 | Received payment of principal plus interest from Brown for the August 7 note. | |||
Dec. | 1 | Wrote off the Perry account against the Allowance for Doubtful Accounts. |
1.Feb. 14 Received Lee's payment of principal and interest on the $13,200, 60-day, 12% note dated December 16. The Hall Company does not prepare reversing entries. Verify the amount of interest using the "CALCULATION OF INTEREST" tab.
2.Mar. 2 Accepted an $10,000, 6%, 90-day note in granting a time extension on the past-due account receivable from Collins Co.
3.Mar. 17 Accepted a $10,800, 30-day, 7% note in granting Kathy Perry a time extension on her past-due account receivable.
4.Apr. 16 Perry dishonored her note.
5.May 31 Collins Co. dishonored its note.
6.Aug. 7 Accepted a(n) $20,000, 90-day, 6% note in granting a time extension on the past-due account receivable of Brown Co.
7. Sept. 3 Accepted a $3,000, 60-day, 10% note in granting Hao Lee a time extension on his past-due account receivable.
8.Nov. 2 Received payment of principal plus interest from Lee for the September 3 note.
9.Nov. 5 Received payment of principal plus interest from Brown for the August 7 note.
10. Dec. 1 Wrote off the Perry account against Allowance for Doubtful Accounts. No additional interest was accrued.
|
Date | General journal | Debit | Credit | ||||
Year 1 | |||||||
Dec 16. | Note receivable-Wang Lee | 13200 | |||||
Accounts receivable-Wang Lee | 13200 | ||||||
(Notes received from customers) | |||||||
Dec 31. | Interest receivable | (13200*12%*15/360) | 66 | ||||
Interest revenue | 66 | ||||||
(Interest accrued) | |||||||
Year 2 | |||||||
Feb 14. | Cash | (13200+66+198) | 13464 | ||||
Note receivable-Wang Lee | 13200 | ||||||
Interest receivable | (13200*12%*15/360) | 66 | |||||
Interest revenue | (13200*12%*45/360) | 198 | |||||
(Payment on note received ) | |||||||
Mar 2. | Note receivable-Collins Co. | 10000 | |||||
Accounts receivable-Collins Co. | 10000 | ||||||
(Notes received from customers) | |||||||
Mar 17. | Note receivable-Kathy perry | 10800 | |||||
Accounts receivable-Kathy perry | 10800 | ||||||
(Notes received from customers) | |||||||
Apr 16. | Accounts receivable-Kathy perry | (10800+63) | 10863 | ||||
Note receivable-Kathy perry | 10800 | ||||||
Interest revenue | (10800*7%*30/360) | 63 | |||||
(Note dishonored) | |||||||
May 31. | Accounts receivable-Collins Co. | (10000+150) | 10150 | ||||
Note receivable-Collins Co. | 10000 | ||||||
Interest revenue | (10000*6%*90/360) | 150 | |||||
(Note dishonored) | |||||||
Aug 7. | Note receivable-Brown Co. | 20000 | |||||
Accounts receivable-Brown Co. | 20000 | ||||||
(Notes received from customers) | |||||||
Sep 3. | Note receivable-Hao Lee | 3000 | |||||
Accounts receivable-Hao Lee | 3000 | ||||||
(Notes received from customers) | |||||||
Nov 2. | Cash | (3000+50) | 3050 | ||||
Note receivable-Hao Lee | 3000 | ||||||
Interest revenue | (3000*10%*60/360) | 50 | |||||
(Payment on note received ) | |||||||
Nov 5. | Cash | (20000+300) | 20300 | ||||
Note receivable-Brown Co. | 20000 | ||||||
Interest revenue | (20000*6%*90/360) | 300 | |||||
(Payment on note received ) | |||||||
Dec 1. | Allowance for doubtful accounts | 10863 | |||||
Accounts receivable-Kathy perry | 10863 | ||||||
(Wrote off uncollectible account) | |||||||
Calculation of interest revenue | |||||||
$ | |||||||
February 14-Wang Lee note: | |||||||
Principal | a | 13200 | |||||
Interest rate | b | 12% |