Question

On September 1, 2017, Marin Inc. sold goods to Bramble Corp., a new customer. Before shipping the goods, Marin’s credit and collections department conducted a procedural credit check and determined that Bramble is a high-credit-risk customer. As a result, Marin did not provide Bramble with open credit by recording the sale as an account receivable. Instead, Marin required Bramble to provide a non–interest-bearing promissory note for $35,800 face value, to be repaid in one year. Bramble has a credit rating that requires it to pay 11% interest on borrowed funds. Marin pays 9% interest on a loan recently obtained from its local bank. Marin has a December 31 year end. The tables in this problem are to be used as a reference for this problem.

Prepare the entries required on Marin’s books to record the sale, annual adjusting entry, and collection of the full face value of the note (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Assume that on the note’s maturity date, Bramble informs Marin that it is having cash flow problems and can only pay Marin 78% of the note’s face value. After extensive discussions with Bramble’s management, Marin’s credit and collections department considers the remaining balance of the note uncollectible. Prepare the entry required on Marin’s books on the note’s maturity date. (Assume the interest has not been recorded at September 1, 2018.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

to Notes Recaivahle 3 22$ 2 2e/7 32252 -1182 1182 226 23 6 Netes Recivatlz Matunty Value 2335 2 Cosa 212 y 33434- 2.2