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Atalas Company had the following balances on its balance sheet as at December 31, 2021: Current assets: Cash Accounts Receivable Allowance for doubtful Accounts Interest Receivable Notes Receivable $420,000 448,888 (58,000) 29,000 460,000 Additional information: 1. The notes receivable account consists of two notes, a $100,000 note and a $360,000 note. The $100,000 note is dated October 20, 2021, with principal and 7.5% interest payable on April 18, 2022. The $360,000 note is dated March 31, 2021, with principal and 10% interest payable on March 26, 2022. 2. During 2022, sales revenue totaled $2,120,000, $1,980,000 cash was collected from customers, and $41,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 8% of year-end gross accounts receivable. Required: A. Calculate the total interest revenue that should appear on the 2022 income statement from the two notes above B. Complete the two journal entries below during the maturity of each of the notes assuming the notes are honored

Atalas Company had the following balances on its balance sheet as at December 31, 2021: Current assets: Cash Accounts Receivable Allowance for doubtful Accounts Interest Receivable Notes Receivable $420,000 448,888 (58,000) 29,000 460,000 Additional information: 1. The notes receivable account consists of two notes, a $100,000 note and a $360,000 note. The $100,000 note is dated October 20, 2021, with principal and 7.5% interest payable on April 18, 2022. The $360,000 note is dated March 31, 2021, with principal and 10% interest payable on March 26, 2022. 2. During 2022, sales revenue totaled $2,120,000, $1,980,000 cash was collected from customers, and $41,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 8% of year-end gross accounts receivable. Required: A. Calculate the total interest revenue that should appear on the 2022 income statement from the two notes above B. Complete the two journal entries below during the maturity of each of the notes assuming the notes are honored

FINANCIAL ACCOUNTING
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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Atalas Company had the following balances on its balance sheet as at December 31, 2021: Current assets: Cash Accounts Receivable Allowance for doubtful Accounts Interest Receivable Notes Receivable Additional information: 1. The notes receivable account consists of two notes, a $100,000 note and a $360,000 note. The $100,000 note is dated October 20, 2021, with principal and 7.5% interest payable on April 18, 2022. The $360,000 note is dated March 31, 2021, with principal and 10% interest payable on March 26, 2022. 2. During 2022, sales revenue totaled $2,120,000, $1,980,000 cash was collected from customers, and $41,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 8% of year-end gross accounts receivable. $420,000 448,888 (58,000) 29,000 460,000 Required: A. Calculate the total interest revenue that should appear on the 2022 income statement from the two notes above. B. Complete the two journal entries below during the maturity of each of the notes assuming the notes are honored View transaction list Journal entry worksheet
Transcribed Image Text:Atalas Company had the following balances on its balance sheet as at December 31, 2021: Current assets: Cash Accounts Receivable Allowance for doubtful Accounts Interest Receivable Notes Receivable Additional information: 1. The notes receivable account consists of two notes, a $100,000 note and a $360,000 note. The $100,000 note is dated October 20, 2021, with principal and 7.5% interest payable on April 18, 2022. The $360,000 note is dated March 31, 2021, with principal and 10% interest payable on March 26, 2022. 2. During 2022, sales revenue totaled $2,120,000, $1,980,000 cash was collected from customers, and $41,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 8% of year-end gross accounts receivable. $420,000 448,888 (58,000) 29,000 460,000 Required: A. Calculate the total interest revenue that should appear on the 2022 income statement from the two notes above. B. Complete the two journal entries below during the maturity of each of the notes assuming the notes are honored View transaction list Journal entry worksheet
View transaction list Journal entry worksheet < Record the journal entry on the maturity date (March 26, 2022) for the note that matures on March 26, 2022 1 Note: Enter debits before credits. 2 1 3 4 2 5 6 A S.No/Date 1 Record entry B Account Title Clear entry C Debit D Credit View general Journal >
Transcribed Image Text:View transaction list Journal entry worksheet < Record the journal entry on the maturity date (March 26, 2022) for the note that matures on March 26, 2022 1 Note: Enter debits before credits. 2 1 3 4 2 5 6 A S.No/Date 1 Record entry B Account Title Clear entry C Debit D Credit View general Journal >
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