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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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  1. 23 May, 17:08
    0
    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
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