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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![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 Todd's payment of principal and interest on the note dated December 16.
March 2 Accepted a(n) $6,900, 7%, 90-day note in granting a time extension on the past-due account receivable from Midnight
Company.
March 17 Accepted a $2,000, 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) $8,400, 90-day, 10 % note in granting a time extension on the past-due account receivable of Mulan
Company.
September 3 Accepted a $2,300, 60-day, 11% 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?](https://content.bartleby.com/qna-images/question/2debb7b5-53d2-4af3-be43-82d8e96c6409/6e9c2e68-a17c-4f8f-818e-117c30014119/w0umq2_thumbnail.png)
Transcribed Image Text: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 Todd's payment of principal and interest on the note dated December 16.
March 2 Accepted a(n) $6,900, 7%, 90-day note in granting a time extension on the past-due account receivable from Midnight
Company.
March 17 Accepted a $2,000, 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) $8,400, 90-day, 10 % note in granting a time extension on the past-due account receivable of Mulan
Company.
September 3 Accepted a $2,300, 60-day, 11% 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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