Question

The following selected transactions are from Springer Company. 2016 Nov. 1 Accepted a $4,800, 90-day, 8% note dated this day in granting Steve Julian a time extension on his past- due account receivable. Made an adjusting entry to record the accrued interest on the Julian note. Dec. 31 2017 Jan. 30 Feb. 28 Received Julian's payment for principal and interest on the note dated November 1. Check Jan. 30. Cr. Interest Revenue, $32 Accepted a $12,600, 30-day, 8% note dated this day in granting a time extension on the past-due account receivable from King Co. Accepted a $6,200, 60-day, 12% note dated this day in granting Myron Shelley a time extension on his past-due account receivable. The King Co. dishonored its note when presented for payment. Mar. 1 30

Answer 1

Answers Page No ① 0 Jowinal entries to record the transactions Accounts tible Debit Date 1 Credito $ 4800 Now I 2016 $4800 $64 Dec3l 2016 $ 64 $4896 Jan 30, 2010 $ Nobes Oreceivable-s. Julion Account receivables- Julian Interest receivable - Pinterest revenue - Cash Interest revenue Interest receivable Notes Receivable --S. Jalian Notes receivable - Accounts receivable - king Co Notes oreceivable -- Mu shellen Accounts receivable - M. Shelley $ 4800 feb 28, 2017 $12600 Marl, $ 6200 2017 $6200 $12684 Mar 30 2017 Accounts receivable - King Co Interest revenue Motes oreceivable - king Co $. 12600

Apr 30 2017 2017 2017 Page No (2) Date Account Gilfe Debit I Gedib cash * 6324 Interest revenue $ 124 Notes receivable $ 6200 June 15, Notes receivable - R - Solon $2000 on Accounts receivable -Risolon $ 2000 June 2!, Notes creceivable - 5. felbon $9500 Accounts receivable - J. Felbon $9500 $ 2039 Aug 14, Interest revenue $39 Notes Receivable - R. Solon - $ 2000 Sept 19, - Cash #9690 2017 Interest revenue $190 Nolies dieceivable --Jifelton - $ 9500 Nov 30, Allowance for doubtful accounts $ 12684 2017 Accounts receivable :- King Co Cash 2017 $12684 In the above journal entries,

Total days = 360 days : Page No ③ On dec 31, 2016, Interest receivable = $ 4800* 8 %. X 60 e $ 64 90-30 = Godays On Jan 30, 2017, Interest revenue - $ 32 Interest receivable = $64 On Mar 30, 2017 , Accounts receivable = $12600 + (126001 89 30) 12600 + 84 $12684 Interest revenue = 12600 X 8% x 300 = $84 On April 30,2011, Interest blevenue = $124 cash = $ 6200 + 124 $6324

Page • No 4 On Aug , 2017 , Interest revenue = 2000x85. X ¿ $ 32 Cash = 2000+32 = $2032 On sept 19,2017, Interest revenue = $9500 X 8% * = $ 190 Analysis component - The loan is still outstanding at period end ishen a business pledges its receivables as security for a loan. The business must disclone this information in notes to ots finan -cial statements .. . The business dishono as its obligations under the loan, the Coreditor can claim the amount of

Page No 6 Edentified oreceivables in the pledge as collateral to cover, the loan meant by the business has committed a portion of its assets to cover a specific portion of its liabilities. This arrangement must be disclosed to satisfy the full disclosure poinciple.