Question

Required information [The following information applies to the questions displayed below.] Following are transactions of Danica Company. Dec. 13 Accepted a $11,000, 45-day, 9% note in granting Miranda Lee a time extension on her past-due account receivable. 31 Prepared 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, 10%, 90-day note in granting a time extension on the past-due account receivable of Tomas Company. 17 Accepted a $3,000, 30-day, 8% note in granting H. Cheng a time extension on his past-due account receivable.

Apr. 16 H. Cheng dishonored his note.

May 1 Wrote off the H. Cheng account against the Allowance for Doubtful Accounts.

June 1 Received the Tomas payment for principal and interest on the note dated March 3. Complete the table to calculate the interest amounts and use those calculated values to prepare your journal entries. (Do not round intermediate calculations. Use 360 days a year.)

Complete this question by entering your answers in the tabs below.

• M Lee Note
• Tomas Co Note
• H Cheng Note
• General Journal

Complete the table to calculate the interest amounts.

	Total Through Maturity Amount Accrued at December 31 Interest Recognized January 27 Principal Rate (%) Time Total interest

Journal entry worksheet

Note: Enter debits before credits.

	Date General Journal Debit Credit Jan 27

Answer 1

M.Lee Note
	total	Amount	interest
	through	accrued at	Recognized
	Maturity	31-Dec	27-Jan
Principal	11,000	11,000	11,000
Rate(%)	9%	9%	9%
time	45/360	18/360	27/360
total intt	124	50	74
Tomas co Note
	total
	through
	Maturity
Principal	5,000
Rate(%)	10%
time	90/360
total intt	125
H.Cheng note
	total
	through
	Maturity
Principal	3,000
Rate(%)	8%
time	30/360
total intt	20
Journal Entries
Date	General Journal				Debit	Credit
2016
13-Dec	Note receivable				11,000
	Accounts receivable					11,000
31-Dec	interest receivable				50
	interest income					50
2017
27-Jan	Cash				11,124
	interest receivable					50
	interest income					74
	Note receivable -M lee					11,000
3-Mar	Note receivable				5,000
	Account receivable-Tomas					5,000
17-Mar	Note receivable				3,000
	Account receivable-H.Cheng					3,000
16-Apr	Account receivable-H.Cheng				3,020
	interest income					20
	note receivable					3,000
1-May	Allowance for Doubtful Accounts				3,020
	Accounts receivable-H.Cheng					3,020
1-Jun	Cash				5,125
	interest income					125
	note receivable-tomas					5,000