Year 1 December 16 Accepted a(n) $11,800, 60-day, 9 note in granting Danny Todd a time extension on his past-due account 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) 57,600, 98, 90-day note in granting a tine extension on the past-due account receivable from Midnight Company. March 17 Accepted a $3,000, 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) $8,950, 90-day, 118 note in granting a tine extension on the past-due account receivable of Mulan Company. September 3 Accepted a $2,250, 60-day, 128 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 Ohim pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of recebuables?
Year 1 December 16 Accepted a(n) $11,800, 60-day, 9 note in granting Danny Todd a time extension on his past-due account 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) 57,600, 98, 90-day note in granting a tine extension on the past-due account receivable from Midnight Company. March 17 Accepted a $3,000, 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) $8,950, 90-day, 118 note in granting a tine extension on the past-due account receivable of Mulan Company. September 3 Accepted a $2,250, 60-day, 128 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 Ohim pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of recebuables?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Question
Transcribed Image Text:1
2
Date
February 14
Note: Enter debits before credits.
3
Received Todd's payment of principal and interest on the note dated December
16.
Record entry
Date
March 02
General Journal
Clear entry
Note: Enter debits before credits.
7
General Journal
10
Debit
Accepted a(n) $7,600,9%, 90-day note in granting a time extension on the
past-due account receivable from Midnight Company.
Credit
View general journal
Debit Credit
>
Midnight Company dishonored its note.
Note: Enter debits before credits.
Date
May 31
Note: Enter debits before credits.
General Journal
Date
September
03
Accepted a(n) $2,250, 60-day, 12% note in granting Noah Carson a time
extension on his past-due account receivable.
Debit
General Journal
Credit
Debit
Credit
Accepted a(n) $8,950, 90-day, 11% note in granting a time extension on the
past-due account receivable of Mulan Company.
Note: Enter debits before credits.
Date
August 07
General Journal
Received payment of principal plus interest from Carson for the September 3
note.
Note: Enter debits before credits.
Date
November
02
Debit Credit
General Journal
Debit Credit
Transcribed Image Text:Year 1
December 16 Accepted a(n) $11,800, 60-day, 9 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) $7,600, 98, 90-day hote in granting a tine extension on the past-due account receivable from
Midnight Company.
March 17 Accepted a $3,000, 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) $8,950, 90-day, 118 note in granting a tine extension on the past-due account receivable of
Mulan Company.
September 3 Accepted a $2,250, 60-day, 128 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?
Received Todd's payment of principal and interest on the note dated December
16.
te: Enter debits before credits.
Date
February 14
Record entry
General Journal
Clear entry
10
Dobit
Credit
>
View general Journal
Accepted a(n) $7,600, 9%, 90-day note in granting a time extension on the
past-due account receivable from Midnight Company.
Midnight Company dishonored its note.
Note: Enter debits before credits.
Date
May 31
General Journal
Debit
Accepted a(n) $3,000, 30-day, 7% note in granting Ava Privet a time
extension on her past-due account receivable.
Note: Enter debits before credits.
Date
March 17
Privet dishonored her note.
Note: Enter debits before credits.
Date
April 16
Credit
General Journal
General Journal
Date
August 07
Note: Enter debits before credits.
Debit
Accepted a(n) $8,950, 90-day, 11% note in granting a time extension on the
past-due account receivable of Mulan Company.
General Journal
Debit Credit
Credit
Debit Credit
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