What does 18/360 from? Thank you. JOURNALDateParticularsDebit Amt ($)Credit Amt ($)2014NoteDec 139,500receivables. DrТo aсcount9,500receivables(Notereceivablesreceived againstaccountreceivables)Accrued interest.38Dec 31DrTo interest38revenue(Interest for 18days due onnote receivable)Calculation of outstanding interest = 9500 * 8% * 18/360 = $38 Prepare journal entries for the following selected transactions of Danica Company for 2014.Exercise 9-10Notes receivable2014transactionsDec. 13 Accepted a $9,500, 45-day, 8% note dated December 13 in granting Miranda Lee a time exten- C2sion on her past-due account receivable.31 Prepared an adjusting entry to record the accrued interest on the Lee note.Check Dec.31, Cr.Interest Revenue $38Refer to the information in Exercise 9-10 and prepare the journal entries for the following selected trans-actions of Danica Company for 2015.Exercise 9-11Notes receivabletransactions P32015Jan. 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 dated March 3 in granting a time extension on the past-Check Jan. 27, Dr. Cash$9,595due account receivable of Tomas Company.17 Accepted a $2,000, 30-day, 9% note dated March 17 in granting H. Cheng a time extension onhis past-due account receivable.Apr. 16 Cheng dishonors his note when presented for payment.May 1 Wrote off the Cheng account against the Allowance for Doubtful Accounts.June 1 Received the Tomas payment for principal and interest on the note dated March 3.June 1, Dr. Cash$5,125

Accrued interest is the amount of interest that is receivable at the end of the accounting period.…

Answered: What does 18/360 from? Thank you.

Business

Accounting

What does 18/360 from? Thank you.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 13P: Notes Receivable Transactions The following notes receivable transactions occurred for Harris...

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Notes Receivable Transactions The following notes receivable transactions occurred for Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.) Required: 1. Prepare the journal entries to record the preceding note transactions and the necessary adjusting entries on December 31. (Assume that Harris does not normally sell its notes and uses a 360-day year for the purpose of computing interest. Round all calculations to the nearest penny.) 2. Show how Harris notes receivable would be disclosed on the December 31 balance sheet. (Assume these are the only note transactions encountered by Harris during the year.)
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