Year 1 General Journal tab - Prepare the Year 2 journal entries related to the notes and accounts receivable of Clark Co. Calculation of interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries. Verify that total interest revenue agrees with the trial balance. Dec. 16 Accepted a $14,400, 60-day, 8% note in granting Hao 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 $9,000, 8%, 90-day note in granting a time extension on the past-due account receivable from Taylor Co. 17 Accepted a $4,200, 30-day, 10% note in granting Susan Allen a time extension on her past-due account receivable. Apr. 16 Allen dishonored her note. May 31 Taylor Co. dishonored its note. Aug. 7 Accepted a $12,000, 90-day, 12% note in granting a time extension on the past-due account receivable of Carter Co. Sep. 3 Accepted a $5,400, 60-day, 10% note in granting June Taylor a time extension on his past-due account receivable. Nov. 2 Received payment of principal plus interest from Taylor for the September 3 note. Nov. 5 Received payment of principal plus interest from Carter for the August 7 note. Dec. 1 Wrote off the Allen account against the Allowance for Doubtful Accounts.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Year 1
General Journal tab - Prepare the Year 2
Calculation of interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries. Verify that total interest revenue agrees with the
| Dec. | 16 | Accepted a $14,400, 60-day, 8% note in granting Hao Lee a time extension on his past-due account receivable. | |||
| 31 | Made an |
Year 2
| Feb. | 14 | Received Lee’s payment of principal and interest on the note dated December 16. | |||
| Mar. | 2 | Accepted a $9,000, 8%, 90-day note in granting a time extension on the past-due account receivable from Taylor Co. | |||
| 17 | Accepted a $4,200, 30-day, 10% note in granting Susan Allen a time extension on her past-due account receivable. | ||||
| Apr. | 16 | Allen dishonored her note. | |||
| May | 31 | Taylor Co. dishonored its note. | |||
| Aug. | 7 | Accepted a $12,000, 90-day, 12% note in granting a time extension on the past-due account receivable of Carter Co. | |||
| Sep. | 3 | Accepted a $5,400, 60-day, 10% note in granting June Taylor a time extension on his past-due account receivable. | |||
| Nov. | 2 | Received payment of principal plus interest from Taylor for the September 3 note. | |||
| Nov. | 5 | Received payment of principal plus interest from Carter for the August 7 note. | |||
| Dec. | 1 | Wrote off the Allen account against the Allowance for Doubtful Accounts. |
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