Question

The following selected transactions are from Wilson Company.

Year 1

Dec.		16			Accepted a $19,200, 60-day, 10% note in granting Debbie Hall a time extension on his past-due account receivable.
		31			Made an adjusting entry to record the accrued interest on the Hall note.

Year 2

Feb.		14			Received Hall’s payment of principal and interest on the note dated December 16.
Mar.		2			Accepted a $8,000, 10%, 90-day note in granting a time extension on the past-due account receivable from Sanchez Co.
		17			Accepted a $6,600, 30-day, 10% note in granting Rick Mitchell a time extension on her past-due account receivable.
Apr.		16			Mitchell dishonored her note.
May		31			Sanchez Co. dishonored its note.
Aug.		7			Accepted a $20,000, 90-day, 12% note in granting a time extension on the past-due account receivable of Parker Co.
Sep.		3			Accepted a $10,200, 60-day, 10% note in granting Jean Clark a time extension on his past-due account receivable.
Nov.		2			Received payment of principal plus interest from Clark for the September 3 note.
Nov.		5			Received payment of principal plus interest from Parker for the August 7 note.
Dec.		1			Wrote off the Mitchell account against the Allowance for Doubtful Accounts.

Prepare the journal entries related to notes receivable and accounts receivable. Hint: Use the "Calculation of Interest" tab to ensure the accuracy of your entries.Feb. 14 Received

Hall's payment of principal and interest on the $19,200, 60-day, 10% note dated December 16. The Wilson Company does not prepare reversing entries. Verify the amount of interest using the "CALCULATION OF INTEREST" tab.

Mar. 2 Accepted an $8,000, 10%, 90-day note in granting a time extension on the past-due account receivable from Sanchez Co.

Mar. 17 Accepted a $6,600, 30-day, 10% note in granting Rick Mitchell a time extension on her past-due account receivable.

Apr. 16 Mitchell dishonored her note.

May 31 Sanchez Co. dishonored its note.

Aug. 7 Accepted a(n) $20,000, 90-day, 12% note in granting a time extension on the past-due account receivable of Parker Co.

Sept. 3 Accepted a $10,200, 60-day, 10% note in granting Jean Clark a time extension on his past-due account receivable.

Nov. 2 Received payment of principal plus interest from Clark for the September 3 note.

Nov. 5 Received payment of principal plus interest from Parker for the August 7 note.

Dec. 1 Wrote off the Mitchell account against Allowance for Doubtful Accounts. No additional interest was accrued.

Enter the principal amount, interest rate, and number of days of interest to be recorded for each note. Verify that total interest revenue agrees with the trial balance.

Dates:Jan 01 to: Dec 31

Wilson Co. Calculation of interest revenue February 14 - Hall note: Principal Interest rate Number of days' interest to be recorded in Year 2 Number of days' interest to be recorded in Year 2 Principal Interest rate Number of days' interest to be recorded in Year 2 Number of days' interest to be recorded in Year 2 Number of days' interest to be recorded in Year 2 Number of days' interest to be recorded in Year 2 Total interest revenue - Year 2 $0

Answer 1

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General Journal:						Feb-14, Hall:
						Principal		$   19,200
Date	Account	Debit	Credit			ROI		10%
Year 1						No of Days		45
Dec 16	Note Receivable	$    19,200
	Accounts Receivable-Hall		$     19,200			Interest Revenue		$         240
Dec 31	Interest Receivable	$             80				April -16, Mitchel:
	Interest Revenue		$              80			Principal		$     6,600
	($19,200*10%*15/360)					ROI		10%
						No of Days		30
Year 2
Feb 14	Cash	$    19,520				Interest Revenue		$           55
	Note Receivable		$     19,200
	Interest Revenue		$           240			May 31, Sanchez:
	Interest Receivable		$              80			Principal		$     8,000
						ROI		10%
Mar 2	Note Receivable	$       8,000				No of Days		90
	Accounts Receivable-Sanchez		$        8,000
						Interest Revenue		$         200
Mar 17	Note Receivable	$       6,600
	Accounts Receivable-Mitchel		$        6,600
Apr 16	Accounts Receivable-Mitchel	$       6,655
	Note Receivable		$        6,600
	Interest Revenue		$              55
May 31	Accounts Receivable-Sanchez	$       8,200
	Note Receivable		$        8,000			Nov 2, Jean Clark
	Interest Revenue		$           200			Principal		$     4,200
						ROI		10%
						No of Days		60
						Interest Revenue		$           70
Aug 7	Note Receivable	$    20,000				Nov 5, Parker
	Accounts Receivable-Parker		$     20,000			Principal		$   20,000
						ROI		12%
Sep 3	Note Receivable	$       4,200				No of Days		90
	Accounts Receivable-Jean Clark		$        4,200
						Interest Revenue		$         600
Nov 2	Cash	$       4,270
	Note Receivable		$        4,200			Total interest Revenue for 2017		$     1,165
	Interest Revenue		$              70
Nov 5	Cash	$    20,600
	Note Receivable		$     20,000
	Interest Revenue		$           600
Dec 1	Allowance for Doubtful Accounts	$       6,655
	Accounts Receivable-Mitchell		$        6,655