Year 1December 16Accepted a(n) $10,200, 60-day, 7% note in granting Danny Todd a time extension on his past-due account receivable.December 31Made an adjusting entry to record the accrued interest on the Todd note.Year 2February 14Received Todd’s payment of principal and interest on the note dated December 16.March 2Accepted a(n) $6,500, 7%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company.March 17Accepted a $3,400, 30-day, 7% note in granting Ava Privet a time extension on her past-due account receivable.April 16Privet dishonored her note.May 31Midnight Company dishonored its note.August 7Accepted a(n) $7,100, 90-day, 10% note in granting a time extension on the past-due account receivable of Mulan Company.September 3Accepted a $3,560, 60-day, 9% note in granting Noah Carson a time extension on his past-due account receivable.November 2Received payment of principal plus interest from Carson for the September 3 note.November 5Received payment of principal plus interest from Mulan for the August 7 note.December 1Wrote 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, Year 1.1-b. Use the calculated value to prepare your journal entries for Year 1 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 Year 2 transactions.2. If Ohlm pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of receivables?

Step by Step Explanations: 1a) Total Through Maturity Amount Accrued at dec 31 Interest…

Answered: Required: 1-a. First, complete the…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 75APSA: Note Payable and Accrued Interest Fairbome Company borrowed $60,000 on an 8%, interest-bearing note...

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Year 1

December 16	Accepted a(n) $10,200, 60-day, 7% note in granting Danny Todd a time extension on his past-due account receivable.
December 31	Made an adjusting entry to record the accrued interest on the Todd note.

Year 2

February 14	Received Todd’s payment of principal and interest on the note dated December 16.
March 2	Accepted a(n) $6,500, 7%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company.
March 17	Accepted a $3,400, 30-day, 7% note in granting Ava Privet a time extension on her past-due account receivable.
April 16	Privet dishonored her note.
May 31	Midnight Company dishonored its note.
August 7	Accepted a(n) $7,100, 90-day, 10% note in granting a time extension on the past-due account receivable of Mulan Company.
September 3	Accepted a $3,560, 60-day, 9% note in granting Noah Carson a time extension on his past-due account receivable.
November 2	Received payment of principal plus interest from Carson for the September 3 note.
November 5	Received payment of principal plus interest from Mulan for the August 7 note.
December 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, Year 1.
1-b. Use the calculated value to prepare your journal entries for Year 1 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 Year 2 transactions.
2. If Ohlm pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of receivables?

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