Problem 9-5A (Algo) Analyzing and journalizing notes receivable transactions LO C2, C3, P4 The following...
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Accounting
Problem 9-5A (Algo) Analyzing and journalizing notes receivable transactions LO C2, C3, P4
The following transactions are from Ohlm Company.
Note: Use 360 days a year.
Year 1
December 16
Accepted a(n) $13,700, 60-day, 7% 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 Todds payment of principal and interest on the note dated December 16.
March 2
Accepted a(n) $7,300, 7%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company.
March 17
Accepted a $2,300, 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, 8% note in granting a time extension on the past-due account receivable of Mulan Company.
September 3
Accepted a $2,410, 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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