Question

Following are selected transactions of Danica Company for 2016. Dec. 13 Accepted a $18,ø00, 45-day, 10% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable. 31 Prepared an adjusting entry to record the accrued interest on the Lee note. Complete the table to calculate the interest amounts at December 31S and use the calculated value to prepare your journal entries. (Do not round your intermediate calculations. Use 360 days a year.) Complete this question by entering your answers in the tabs below. General Interest Amounts Journal Complete the table to calculate the interest amounts at December 31st. Interest Total Through Recognized Maturity December 31 Principal Rate (% Time Total interest General Journal <Interest Amounts

Answer 1

Solution:

	Total Through Maturity	Interest recognized December 31
Principal	$18,000.00	$18,000.00
Rate (%)	10%	10%
Time	45 days	18 days
Total interest	$225.00	$90.00

Journal Entries - Danica Company
Date	Particulars	Debit	Credit
13-Dec	Note receivables Dr	$18,000.00
	To Accounts receivables		$18,000.00
	(To record note receivables)
31-Dec	Interest receivables Dr	$90.00
	To Interest revenue		$90.00
	(To record interst accrued)