Question

two parts to one question

Required information [The following information applies to the questions displayed below.] Following are transactions of Danica Company Dec. 13 Accepted a $12,000, 45-day, 6% note 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 31st and use the calculated value to prepare your journal entries. Do not round your intermediate calculations. Use 360 days a year.)

Answer 1

Jnterest Tolal Through Recognized Matunity Becember 31 12,000 67 Paincipat Rate (%) 12,000 18/360 45/360 $90 Time Total inteaest 36 Calculation: Total though matusity Paincipal x Rate x Time Ia,000 x 67 x 45 4days 360 90 3rterest Recognized: Total nterest Paineipal Rate x Time $1.2,000 x 67. x 18 days 36D 36 Note: 18 olays (Prom December 13 to December 31)

General Journal Debit Credit No. Date Notes receivable- M.Lee 1 Dec 13. 12,000 f12,000 Accounts receivable- M. Lee hote To Aecond aets receivable) Snterest Receivable dDec 31 36 Sntereit Revenue $36 To Aecond interest reuenue) above in p art (1) 9nterest Reuenue is calculated Note