Following are selected transactions for Ridge Company.

Mar. 21 Accepted a $9,500, 180-day, 8% note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable.

Sept. 17 Jackson dishonors her note when it is presented for payment.

Dec. 31 After exhausting all legal means of collection, Ridge Company writes off Jacksons account against the Allowance for Doubtful Accounts.

First, complete the table below to calculate the interest amounts at September 17. (Use 360 days a year.)

Accepted a $9,500, 180-day, 8% note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable.

Question

Business

Angela Bartlett

23 May, 16:27

Following are selected transactions for Ridge Company.

Mar. 21 Accepted a $9,500, 180-day, 8% note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable.

Sept. 17 Jackson dishonors her note when it is presented for payment.

Dec. 31 After exhausting all legal means of collection, Ridge Company writes off Jacksons account against the Allowance for Doubtful Accounts.

First, complete the table below to calculate the interest amounts at September 17. (Use 360 days a year.)

Accepted a $9,500, 180-day, 8% note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable.

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Answers (1)

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Madelynn Bishop · Answer 1

1) Calculating the interest amount at September 17, (using 360 days a year)

Total Through Maturity

Principal $9,500

Rate 8%

Time 180/360

Total Interest $380

2) Preparing the Journal Entries for above transactions

Date General Journal Debit Credit

Mar 21 Notes receivable-T Jackson $9,500

Account receivable-T Jackson $9,500

Sept 17 Accounts receivable-T Jackson $9,880

Notes receivable-T Jackson $9,500

Interest Revenue $380

Dec 31 Allowance for Doubtful Accounts $9880

Accounts receivable-T Jackson $9,880