Problem 7-5A (Static) Analyzing and journalizing notes receivable transactions LO C2, C3, P4 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 April 16 Privet dishonored her note. granting Ava Privet a time extension on her past-due account receivable. 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 of principal plus interest from Carson for the September 3 note. November 5 Received payment of principal plus interest from Mulan for the August 7 note. December 1 Wrote off the Privet account against the Allowance for Doubtful Accounts. Required: 1-a. First, complete the table below to calculate the interest amount at December 31, Year 1. 1-b. Use the calculated value to prepare your journal entries for Year 1 transactions. 1-c. First, complete the table below to calculate the interest amounts. 1-d. Use those calculated values to prepare your journal entries for Year 2 transactions.
Problem 7-5A (Static) Analyzing and journalizing notes receivable transactions LO C2, C3, P4 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 April 16 Privet dishonored her note. granting Ava Privet a time extension on her past-due account receivable. 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 of principal plus interest from Carson for the September 3 note. November 5 Received payment of principal plus interest from Mulan for the August 7 note. December 1 Wrote off the Privet account against the Allowance for Doubtful Accounts. Required: 1-a. First, complete the table below to calculate the interest amount at December 31, Year 1. 1-b. Use the calculated value to prepare your journal entries for Year 1 transactions. 1-c. First, complete the table below to calculate the interest amounts. 1-d. Use those calculated values to prepare your journal entries for Year 2 transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:First, complete the table below to calculate the interest amounts.
Principal
Rate (%)
Time
Total interest
Midnight
Company Note -
March 2, Year 2
Total through maturity
A. Privet Note -
March 17, Year 2
Mulan Note -
August 7, Year 2
N. Carson Note -
September 3, Year
2
Transcribed Image Text:Problem 7-5A (Static) Analyzing and journalizing notes receivable transactions LO C2, C3, P4
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
April 16 Privet dishonored her note.
granting Ava Privet a time extension on her past-due account receivable.
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 of principal plus interest from Carson for the September 3 note.
November 5 Received payment of principal plus interest from Mulan for the August 7 note.
December 1 Wrote off the Privet account against the Allowance for Doubtful Accounts.
Required:
1-a. First, complete the table below to calculate the interest amount at December 31, Year 1.
1-b. Use the calculated value to prepare your journal entries for Year 1 transactions.
1-c. First, complete the table below to calculate the interest amounts.
1-d. Use those calculated values to prepare your journal entries for Year 2 transactions.
2. If Ohlm pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge
of receivables?
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B Required 1C Required 1D
First, complete the table below to calculate the interest amount at December 31, Year 1.
Interest
recognized
December 31
Principal
Rate (%)
Time
Total interest
Required 2
Total through
maturity
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