The following selected transactions are from Ohlm Company. (Use 360 days a year.
ID: 2335058 • Letter: T
Question
The following selected transactions are from Ohlm Company. (Use 360 days a year.) 2016 Dec. 16 Accepted a $11,400, 60-day, 6 note dated this day in granting Danny Todd a time extension on his past-due account receivable 31 Made an adjusting entry to record the accrued interest on the Todd note. 2017 Feb. 14 Received Todd' s payment of principal and interest on the note dated December 16 Mar. 2 Accepted a (n $6,200, 68, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co 17 Accepted a (n) $2,600, 30-day, 7 note dated this day in granting Ava Privet a time extension on her past-due account receivable Apr. 16 Privet dishonored her note when presented for payment May 31 Midnight Co. refused to pay the note that was due to Ohlm Co. on May 31. Prepare the journal entry to charge the dishonored note plus accrued interest to Midnight Co.'s July 16 Received payment from Midnight Co. for the maturity value of its dishonored note plus Aug. 7 Accepted a (n) $8,100, 90-day, 98 note dated this day in granting a time extension on the Sep. 3 Accepted a (n) $3,290, 60-day, 10% note dated this day in granting Noah Carson a time accounts receivable interest for 46 days beyond maturity at 68 past-due account receivable of Mulan Co extension on his past-due account receivable Nov. 2 Received payment of principal plus interest from Carson for the September 3 note. Nov. 5 Received payment of principal plus interest from Mulan for the August 7 note Dec. 1 Wrote off the Privet account against the Allowance for Doubtful Accounts Requirec 1-a. First, complete the table below to calculate the interest amount at December 31, 2016 1-b. Use the calculated value to prepare your journal entries for 2016 transactions. 1-c. First, complete the table below to calculate the interest amounts. -d. Use those calculated values to prepare your journal entries for 2017 transactions. 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, 2016. Total Through Recognized Principal Rate (%) Time Total interest Required 1A Required 1B >Explanation / Answer
Total Thru Maturity
Interest recognized Dec 31
Principal
11,400
11,400
Rate(%)
6%
6%
Time
60
15
Total Interest
114
28.50
Journal Entries 2016
Date
Account
Debit
Credit
16-Dec
Notes receivable- Danny Todd
11,400
To Accounts receivable
11,400
(To reclassify Accounts receivable balance of Danny Todd to a 60 Day Notes receivable)
31-Dec
Interest receivable dr
28.50
To Interest Income
28.5
(To accrue interest receivable on Note due from Danny Todd for the period ended 31 dec)
Interest calculations for 2017:
Total Thru Maturity
Midnight Company Note - March 2, 2017
A Privet Note - March 17,2017
Mulan Note - Aug 7, 2017
Midnight Company Note - May 31, 2017
N Carson Note Sep 3,2017
Principal
6,200
2,600
8,100
6,200
3,290
Rate(%)
6%
7%
9%
6%
10%
Time
90.00
30.00
90.00
46.00
60.00
Total Interest
93.00
15.17
182.25
47.53
54.83
Journal Entries 2017
Date
Account
Debit
Credit
2/14/2017
Bank Account
11,514
To Note Receivable - Danny Todd
11,400
To Interest Receivable
28.50
To Interest Income
85.50
(To record receipt of payment from Danny Todd against the Note receivable drawn up on Dec 16, 2016 including interest owed for 60 days)
3/2/2017
Notes receivable - Midnight Company
6,200
To Accounts receivable
6,200
(To reclassify Accounts receivable balance of Midnight Company to a 90 Day Notes receivable)
3/17/2017
Notes receivable - A Privet
2,600
To Accounts receivable
2,600
(To reclassify Accounts receivable balance of A Privet to a 30 Day Notes receivable)
4/16/2017
Accounts receivable
2,615.17
To Notes receivable - A Privet
2,600
To Interest Income
15.17
( To record dishonour of note by A Privet and interest receivable on the note)
5/31/2017
Accounts receivable
6,290.00
To Notes receivable - Midnight Company
6200
To Interest Income
90
( To record dishonour of note by Midnight Company and interest receivable on the note)
7/16/2017
Bank account
6,337.53
To Accounts Receivable
6,290.00
To Interest income
47.53
(To record receipt of over due amount from Midnight company along with added interest for 46 days)
8/7/2017
Notes receivable - Mulan Co
8,100
To Accounts receivable
8,100
(To reclassify Accounts receivable balance of Mulan Co to a 90 Day Notes receivable)
9/3/2017
Notes receivable - Noah Carson
3,290
To Accounts receivable
3,290
(To reclassify Accounts receivable balance of Noah Carson to a 60 Day Notes receivable)
11/2/2017
Bank Account
8,282.25
To Note receivable - Mulan Co
8100
To Interest Income
182.25
(To record amount received from Mulan Co against the note receivable along with Interest)
11/5/2017
Bank Account
3,344.83
To Note receivable - Noah Carson
3,290
To Interest Income
54.83
(To record amount received from Noah Carson against the note receivable along with Interest)
12/1/2017
Allowance for doubtful debts a.c Dr
2,615.17
To Accounts receivable
2,615.17
(To write off receivable from A Privet)
Total Thru Maturity
Interest recognized Dec 31
Principal
11,400
11,400
Rate(%)
6%
6%
Time
60
15
Total Interest
114
28.50
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