FUNDAMENTAL ACCOUNTING PRINCIPLES
25th Edition
ISBN: 9781264303236
Author: Wild
Publisher: MCG
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Chapter 9, Problem 16QS
To determine
Concept Introduction:
Interest revenue: Promissory notes are written promises to pay a specific amount along with stated interest. Promissory notes are used in many transactions. Sellers prefer notes when the credit period is too long or receivable is a large amount. Interest on notes is paid at an annual pre-determined rate, at the maturity of the note along with the amount payable on the note.
The interest revenue recorded in year 1 and year 2.
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on december 1st Daw company accepts a $18,000, 45-day, 10% note from a customer.
1. prepare the year end adjusting entry to record accrued interest revenue on december 31st.
2. prepare the entry required on the notes maturity date assuming it is honored.
note: using 360 days a year
Journalize the following transactions (assume a 360-day year when calculating interest):
Mar. 1 Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.
May 30 The note of March 1 was dishonored.
If an amount box does not require an entry, leave it blank.
Mar. 1
May 30
Prepare journal entries to record transactions for Vitalo Company. Nov. 1 Accepted a $6,000, 180-day, 8% note from Kelly White in granting a time extension on her past-due account receivable. Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note. Apr. 30 White honored her note when presented for payment.
Chapter 9 Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
Ch. 9 - Credit card sales Prepare journal entries for the...Ch. 9 - Direct write-off method P1 Solstice Company...Ch. 9 - Recovering a bad debt P1 Solstice Company...Ch. 9 - Distinguishing between allowance method and direct...Ch. 9 - Prob. 5QSCh. 9 - Allowance method for bad debts P2 Gomez Corp. uses...Ch. 9 - Reporting allowance for doubtful accounts P2 On...Ch. 9 - Prob. 8QSCh. 9 - Prob. 9QSCh. 9 - Aging of receivables method P3 ^ Net Zero...
Ch. 9 - Prob. 11QSCh. 9 - Prob. 12QSCh. 9 - Prob. 13QSCh. 9 - Prob. 14QSCh. 9 - Prob. 15QSCh. 9 - Prob. 16QSCh. 9 - Prob. 17QSCh. 9 - Prob. 18QSCh. 9 - Prob. 19QSCh. 9 - Prob. 20QSCh. 9 - Prob. 21QSCh. 9 - Exercise 9-1
Accounts receivable subsidiary...Ch. 9 - Prob. 2ECh. 9 - Exercise 9-3
Sales on store credit card
C1
Z-Mart...Ch. 9 - Exercise 9-4
Direct write-off method
Dexter...Ch. 9 - Exercise 9-5 Writing off receivables P2
On January...Ch. 9 - Exercise 9-6 Percent of sales method; write-off...Ch. 9 - Exercise 9-7 Percent of accounts receivable...Ch. 9 - Exercise 9-8 Aging of receivables method P3
Daley...Ch. 9 - Exercise 9-9 Percent of receivables method...Ch. 9 - Exercise 9-10 Aging of receivables schedule...Ch. 9 - Exercise 9-10
Estimating bad debts
P3
At December...Ch. 9 - Exercise 9-11
Notes receivable...Ch. 9 - Exercise 9-12
Notes receivable transactions...Ch. 9 - Exercise 9-14 Honoring a note P4
Prepare journal...Ch. 9 - Exercise 9-15 Dishonoring a note P4
Prepare...Ch. 9 - Exercise 9-16 Selling and pledging accounts...Ch. 9 - Exercise 9-17 Accounts receivable turnover A1 Q...Ch. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Prob. 21ECh. 9 - Prob. 22ECh. 9 - Prob. 23ECh. 9 - Problem 9-1A Sales on account and credit card...Ch. 9 - Problem 9-2A Estimating and reporting bad debts P2...Ch. 9 - Problem 9-3A Aging accounts receivable and...Ch. 9 - Problem 9-4A Accounts receivable transactions and...Ch. 9 - Problem 9-5A Analyzing and journalizing notes...Ch. 9 - Problem 9-1B Sales on account and credit card...Ch. 9 - Problem 9-2B Estimating and reporting bad debts P2...Ch. 9 - Problem 9-3B Aging accounts receivable and...Ch. 9 - Problem 9-4B Accounts receivable transactions and...Ch. 9 - Prob. 5PSBCh. 9 - SP 9 Santana Rey: owner of Business Solutions,...Ch. 9 - Prob. 1GLPCh. 9 - Prob. 1AACh. 9 - Prob. 2AACh. 9 - Prob. 3AACh. 9 - Prob. 1DQCh. 9 - Why does the direct write-off method of accounting...Ch. 9 - Prob. 3DQCh. 9 - Why might a business prefer a note receivable to...Ch. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Anton Blair is the manager of a medium-size...Ch. 9 - Prob. 2BTNCh. 9 - Prob. 3BTNCh. 9 - Prob. 4BTNCh. 9 - Prob. 5BTN
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Similar questions
- Journalize the following, assuming a 360-day year is used for interest computations: Apr. 30 Issued a $126,000, 30-day, 6% note dated April 30 to Misner Co. on account. May 30 Paid Misner Co. the amount owed on the note dated April 30. If an amount box does not require an entry, leave it blank. Apr. 30 May 30 3 3 000 ?arrow_forwardOn October 1, Black Company receives a 4% interest-bearing note from Reese Company to settle a $20,200 account receivable. The note is due in six months. At December 31, Black should record interest revenue of Oa. $212 Ob. $202 Oc. $199 Od. $209arrow_forwardOn December 1, Daw Company accepts a $32,000, 45-day, 9% note from a customer. (1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31. (2) Prepare the entry required on the note's maturity date assuming it is honored. Note: Use 360 days a year. View transaction list No 1 2 Date View journal entry worksheet December 31 January 15 Interest receivable Interest revenue Cash Notes receivable Interest receivable General Journal Debit 240 32,360 Credit 240 32,000 260 Xarrow_forward
- Journalize the following, assuming a 360-day year is used for interest computations: Apr. 30 Issued a $1,080,000, 120-day, 9% note dated April 30 to Misner Co. on account. Paid Misner Co. the amount owed on the note dated April 30. Aug. 30 If an amount box does not require an entry, leave it blank. Apr. 30 Aug. 30arrow_forwardneed help with 1D, Feb 14.! Received Todd’s payment of principal and interest on the note dated December 16. The following transactions are from Ohlm Company. (Use 360 days a year.) Year 1 Dec. 16 Accepted a $10,700, 60-day, 8% note in granting Danny Todd a time extension on his past-due account receivable. 31 Made an adjusting entry to record the accrued interest on the Todd note. Year 2 Feb. 14 Received Todd’s payment of principal and interest on the note dated December 16. Mar. 2 Accepted a(n) $6,600, 8%, 90-day note in granting a time extension on the past-due account receivable from Midnight Co. 17 Accepted a(n) $3,300, 30-day, 7% note in granting Ava Privet a time extension on her past-due account receivable. Apr. 16 Privet dishonored her note. May 31 Midnight Co. dishonored its note. Aug. 7 Accepted a(n) $7,900, 90-day, 10% note in granting a time extension on the past-due account receivable of Mulan Co. Sep. 3…arrow_forwardFollowing are transactions for Vitalo Company. 1 Accepted a $12,000, 180-day, 6% note from Kelly White in granting a time extension on her past-due account receivable. Nov. Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note. Apr. 30 White honored her note when presented for payment. th and April 30 and use those calculated values to prepare your Complete the table to calculate the interest amounts at December 31st journal entries. (Do not round intermediate calculations. Use 360 days a year.) Complete this question by entering your answers in the tabs below. Interest General Amounts Journal Complete the table to calculate the interest amounts at December 31st and April 30th. November 1 January 1 Total Through Through Through Maturity December 31 April 30 Principal Rate (%) Time Total interestarrow_forward
- The following transactions are from Ohlm Company. Note: 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…arrow_forwardOn October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a $17,800 account receivable. The note is due in six months. At December 31, Black should record interest revenue of a.$455 b.$442 c.$445 d.$452arrow_forwardPrepare journal entries for the following transactions of Danica Company. Dec. 13 Accepted a $9,500, 45-day, 8% 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.arrow_forward
- Notes Receivable-Honoring a Note Prepare journal entries to record these selected transactions for Morrobel Company. Nov. 1 Accepted a $6,000, 180-day, 8% note dated November 1 from Yates in granting a time extension on her past-due account receivable. Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the Yates note. Apr. 30 Yates honors her note when presented for payment; February has 28 days for the current year.arrow_forwardThe following transactions are from Ohlm Company. Note: Use 360 days a year. Year 1 December 16 Accepted a(n) $13,700, 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(n) $7,300, 8%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company. March 17 Accepted a $3,700, 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) $7,250, 90-day, 12% note in granting a time extension on the past-due account receivable of Mulan Company. September 3 Accepted a $3,390, 60-day, 12% note in granting Noah Carson a time extension on his past-due account receivable. November 2…arrow_forwardDecember 13 Accepted a $16,000, 45-day, 6% note in granting Miranda Lee a time extension on her past-due account receivable. December 31 Prepared an adjusting entry to record the accrued interest on the Lee note. Exercise 7-18 (Algo) Notes recelvable transactions LO C2 Complete the table to calculate the interest amounts at December 31St and use the calculated value to prepare your journal entr (Do not round your intermediate calculations. Use 360 days a year.) Complete this question by entering your answers in the tabs below. Irterest General Amounts Journal Complete the table to calculate the interest amounts at December 31st. Total Through Maturity Interest Recognized December 31 Principal Rate (%) Time Total interestarrow_forward
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