Crane Corp. owes $ 283,000 to Cheyenne Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Crane Corp. is infinancial trouble, Cheyenne Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $ 236,000, andreduce the interest rate to 6%, payable annually on December 31.(a)Prepare the journal entries on Crane's books on December 31, 2020, 2021, 2022.(b)Prepare the journal entries on Cheyenne Trust's books on December 31, 2020, 2021, 2022.Click here to view factor tables.(Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 58,971. If no entry isrequired, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount isentered. Do not indent manually.) DebitCredit(b) Date Account Titles and ExplanationCheyenne Trust's2020Bad Debt ExpenseAllowance for Doubtful Accounts2021CashAllowance for Doubtful AccountsInterest Revenue2022CashAllowance for Doubtful AccountsInterest Revenue(To record Interest Revenue)CashAllowance for Doubtful AccountsInterest Revenue(To record maturity of Notes Receivable)

Sometimes there comes a situation in which the creditor will not be able to pay the amount due from…

Answered: Crane Corp. owes $ 283.000 to Cheyenne…

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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Ll.102.
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