Question

Following are selected transactions for Ridge Company Mar. 21 Accepted a $9,500, 180-day, 8x note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable. Sept. 17 Jackson dishonored her note when presented for payment. Dec. 31 After exhausting all legal means of collection, Ridge Company wrote off Jackson's account against the Allowance for Doubtful Accounts. Complete the table to calculate the interest amounts at September 17 and use the calculated value to prepare your journal entries. (Use 360 days a year.) Complete this question by entering your answers in the tabs below. Interest Amounts General Journal Complete the table to calculate the interest amounts at September 17. Total Through Maturity Principal Rate (%) Time Total interest General Journal >

Answer 1

	Total Through
	Maturity
Principal	9,500
Rate (%)	8%
Time	180 days
Total Interest	$380

Total interest = 9,500 x 8% x 180/360

= $380

Date	General Journal	Debit	Credit
March 21	Note receivable	$9,500
	Accounts receivable - Tamara Jackson		$9,500
September 17	Accounts receivable - Tamara Jackson	$9,500
	Note receivable		$9,500
December 31	Allowance for doubtful accounts	$9,500
	Accounts receivable - Tamara Jackson		$9,500

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