ollowing are selected transactions of Danica Company for 2016and 2017. 2016 Dec. 13 Accepted...

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Accounting

ollowing are selected transactions of Danica Company for 2016and 2017. 2016 Dec. 13 Accepted a $26,000, 45-day, 6% note datedDecember 13 in granting Miranda Lee a time extension on herpast-due account receivable. 31 Prepared an adjusting entry torecord the accrued interest on the Lee note. 2017 Jan. 27 ReceivedLee's payment for principal and interest on the note dated December13. Mar. 3 Accepted a $20,000, 8%, 90-day note dated March 3 ingranting a time extension on the past-due account receivable ofTomas Company. 17 Accepted a $18,000, 30-day, 8% note dated March17 in granting H. Cheng a time extension on his past-due accountreceivable. Apr. 16 H. Cheng dishonored his note when presented forpayment. May 1 Wrote off the H. Cheng account against the Allowancefor Doubtful Accounts. June 1 Received the Tomas payment forprincipal and interest on the note dated March 3. Complete thetable to calculate the interest amounts and use those calculatedvalues to prepare your journal entries. (Do not round intermediatecalculations. Use 360 days a year.)

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M.Lee Note
	total	Amount	interest
	through	accrued at	Recognized
	Maturity	31-Dec	27-Jan
Principal	26,000	26,000	26,000
Rate(%)	6%	6%	6%
time	45/360	18/360	27/360
total intt	195	78	117


Tomas co Note
	total
	through
	Maturity
Principal	20,000
Rate(%)	8%
time	90/360
total intt	400


H.Cheng note
	total
	through
	Maturity
Principal	18,000
Rate(%)	8%
time	30/360
total intt	120


Journal Entries
Date	General Journal			Debit	Credit
2016
13-Dec	Note receivable			26,000
	Accounts receivable				26,000

31-Dec	interest receivable			78
	interest income				78


2017
27-Jan	Cash			26,195
	interest receivable				78
	interest income				117
	Note receivable				26,000

3-Mar	Note receivable			20,000
	Account receivable-Tomas				20,000

17-Mar	Note receivable			18,000
	Account receivable-H.Cheng				18,000

16-Apr	Account receivable-H.Cheng			18,120
	interest income				120
	note receivable				18,000

1-May	Allowance for Doubtful Accounts			18,120
	Accounts receivable-H.Cheng				18,120

1-Jun	Cash			20,400
	interest income				400
	note receivable				20,000

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Transcribed Image Text

In: Accountingollowing are selected transactions of Danica Company for 2016and 2017. 2016 Dec. 13 Accepted a...ollowing are selected transactions of Danica Company for 2016and 2017. 2016 Dec. 13 Accepted a $26,000, 45-day, 6% note datedDecember 13 in granting Miranda Lee a time extension on herpast-due account receivable. 31 Prepared an adjusting entry torecord the accrued interest on the Lee note. 2017 Jan. 27 ReceivedLee's payment for principal and interest on the note dated December13. Mar. 3 Accepted a $20,000, 8%, 90-day note dated March 3 ingranting a time extension on the past-due account receivable ofTomas Company. 17 Accepted a $18,000, 30-day, 8% note dated March17 in granting H. Cheng a time extension on his past-due accountreceivable. Apr. 16 H. Cheng dishonored his note when presented forpayment. May 1 Wrote off the H. Cheng account against the Allowancefor Doubtful Accounts. June 1 Received the Tomas payment forprincipal and interest on the note dated March 3. Complete thetable to calculate the interest amounts and use those calculatedvalues to prepare your journal entries. (Do not round intermediatecalculations. Use 360 days a year.)