I\'m not sure how to do May 31, I\'m pretty sure the rest are fine, but please t

Question

I'm not sure how to do May 31, I'm pretty sure the rest are fine, but please tell me if I'm wrong

The following selected transactions are from Lee Company. 14 2016 Dec. 16 Accepted a $21,600, 60-day, 8% note dated this day in granting June Taylor a time extension on his past-due account receivable 31 Made an adjusting entry to record the accrued interest on the Taylor note Skipped 2017 Feb. 14 Received Taylor's payment of principal and interest on the note dated December 16 Mar. 2 Accepted a $7,000, 8%, 90-day note dated this day in granting a time extension on the past-due account receivable from Brown 17 Accepted a $15,000, 30-day, 8% note dated this day in granting Maria Gonzalez a time extension on her past-due account receivable Apr. 16 Gonzalez dishonored her note when presented for payment May 31 Brown Co. refused to pay the note that was due to Lee Co. on May 31. Prepare the journal entry to charge the dishonored July 16 Received payment from Brown Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at Aug. 7 Accepted a $20,000, 90-day, 8% note dated this day in granting a time extension on the past-due account receivable of Sep. 3 Accepted a $11,400, 60-day, 10% note dated this day in granting Carlos Sanchez a time extension on his past-due account note plus accrued interest to Brown Co. 's accounts receivable 8% Garcia Co receivable Nov. 2 Received payment of principal plus interest from Sanchez for the September 3 note Nov. 5 Received payment of principal plus interest from Garcia for the August 7 note Dec. Wrote off the Gonzalez account against the Allowance for Doubtful Accounts General Journal GeneralTrial Balance Receivables Ledger Schedule of Calculation of Requirement Interest Enter the principal amount, interest rate, and number of days of interest to be recorded for each note. Verify that total interest revenue agrees with the trial balance Dates: Jan 01 to Dec 31 Lee Co. Calculation of interest revenue February 14-Taylor note: Principal 21,600

Explanation / Answer

The amount payable by Brown Company on May 31 would be the sum total of interest payable on the note and the interest on the given rate on the note. By the given information the 90 day note was accepted by Brown Co. of $7,000. On the maturity on 31st May (after complition of 90 days) Brown co. dishourned the note. Lee company transferred the total debt amount (principle+interest) to Accounts receivble. Following is the amount to be transferred to the account receiveble:

Calculation of Interest on Maturity = Amount due * rate of Interest* Number of days/360

=$7000*8%*90/360 = $140

Amount payable by Brown Co. = $7,000 + $140( to be transferred to accounts receiveble.)

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