Question

The following selected transactions are from Ohlm Company. (Use 360 days a year.) 2016 Dec. 16 Accepted a $13,000, 60-day, 9% 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) $6,800, 9%, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co. 17 Accepted a(n) $3,400, 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 9%. Aug. 7 Accepted a(n) $7,400, 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) $2,530, 60-day, 9% 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

Date	Particulars	Debit	Credit
16-Dec-16	Notes receivable a/c	$13,000
	Accounts Receivable a/c		$13,000
31-Dec-16	Interest receivable a/c	$48.75
	Interest revenue a/c		$48.75
Working Note:-
Interest accrued=$13000*9%*15/360
14-Feb-17	Cash a/c	$13,195
	Interest revenue a/c		$146.25
	Interest receivable a/c		$48.75
	Notes receivable a/c		$13,000
02-Mar-17	Notes receivable a/c	$6,800
	Accounts Receivable a/c		$6,800
17-Mar-17	Notes receivable a/c	$3,400
	Accounts Receivable a/c		$3,400
16-Apr-17	Accounts receivable a/c	$3,419.83
	Interest revenue a/c		$19.83
	Notes receivable a/c		$3,400.00
31-May-17	Accounts receivable a/c	$6,953
	Interest revenue a/c		$153
	Notes receivable a/c		$6,800
16-Jul-17	Cash a/c	$7,033
	Interest revenue a/c		$80
	Account receivable a/c		$6,953
07-Aug-17	Notes receivable a/c	$7,400
	Accounts Receivable a/c		$7,400
03-Sep-17	Notes receivable a/c	$2,530
	Accounts Receivable a/c		$2,530
02-Nov-17	Cash a/c	$2,567.95
	Interest revenue a/c		$37.95
	Notes receivable a/c		$2,530
05-Nov-15	Cash a/c	$7,603.50
	Interest revenue a/c		$203.50
	Notes receivable a/c		$7,400
01-Dec-17	Allowance for doubtful debt a/c	$3,419.83
	Accounts receivable a/c		$3,419.83
	Table
		Midnight Co.	Privet	Mulan	Midnight	Carson
		02-Mar-17	17-Mar-17	07-Aug-17	31-May-17	03-Sep-17
	Principal	6800	3400	7400	6953	2530
	Rate (%)	9%	7%	11%	9%	9%
	Time	90/360	30/360	90/360	46/360	60/360
	Total interest	153.00	19.83	203.50	79.96	37.95