Chapter 3, Problem 16E

The following transactions are from Ohlm Company. (Use 360 days a year.) Year 1 December 16 Accepted a $10,800, 60-day, 8% 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 $6,100, 8%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company. March 17 Accepted a $2,400, 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 $7,440, 90-day, 10% note in granting a time extension on the past-due account receivable of Mulan Company. September 3 Accepted a $2,100, 60-day, 10% note in granting Noah Carson a time extension on his past-due account receivable. November 2 Received payment…

The following information relates to the Crane Company at the end of 2020. The accounting period is the calendar year. 1.   Employees are paid every Friday for the five-day week ending on that day. Salaries amount to $3,700 per week. The accounting period ends on a Tuesday. 2.   A note for $6,200 was received from a customer in a sales transaction on April 1, 2020. The note matures in one year and bears 6% interest. 3.   On September 1, 2020, Crane borrowed $12,300 cash by signing a note payable due in one year at 8% interest. Using the information given above, prepare the necessary adjusting entries at December 31, 2020.

On March 1, the Garner Corporation borrowed $75,000 from the First Bank of Midlothian on a 1-year, 5% note. Required:     Hide     If the company keeps its records on a calendar year, what adjusting entry should Garner make on December 31?             Dec. 31                 (Record accrual of interest expense)