1 Received from Aye Company a P5,000,000, 12%1 Discounted the Aye Company note at the bank1 Received from Bee Company a P6,000,000, 10%16 Discounted the Bee Company note at the bankProblem 9-7 (IAA)current year.aJune90-day note for merchandise sold,July60-day note in full payment of an account.at 12%.at 12%.August 30 The bank notified Chameleon Company that theBee Company note was paid.30 The bank notified Chameleon Company that AyeCompany defaulted on the note and charged theamount of principal, interest and a fee of P20,000against Chameleon's bank account.30 Received full payment from Aye Company forthe dishonored note plus 12% annual intereston the total amount due for four months.Dec.Required:Prepare journal entries to record the transactions on theassumption:1. The discounting of note receivable is accounted for as asecured borrowing.2. The discounting of note receivable is accounted for asconditional sale with recognition of contingent liability.266

Note receivables: Note receivables can be defined as the written promise made by the borrower to…

Answered: 1. The discounting of note receivable…

1. The discounting of note receivable is accounted for as a secured borrowing. 2. The discounting of note receivable is accounted for as conditional sale with recognition of contingent liability.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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