The 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 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?
The 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 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The 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 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?
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