Question

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Following are transactions of Danica Company. Dec. 13 Accepted a $19,000, 45-day, 7% 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. Exercise 7-13 Notes receivable transactions LO P4 Jan. 27 Received Lee's payment for principal and interest on the note dated December 13. Mar. 3 Accepted a $13,000, 6%, 90-day note in granting a time extension on the past-due account receivable of Tomas Company. 17 Accepted a $11,000, 30-day, 8% note in granting H. Cheng a time extension on his past-due account receivable. Apr. 16 H. Cheng dishonored his note. May 1 Wrote off the H. Cheng account against the Allowance for Doubtful Accounts. June 1 Received the Tomas payment for principal and interest on the note dated March 3. Complete the table to calculate the interest amounts and use those calculated values to prepare your journal entries. (Do not round intermediate calculations. Use 360 days a year.) Complete this question by entering your answers in the tabs below. M Lee Note Tomas Co Note H Cheng Note General Journal Complete the table to calculate the interest amounts. Principal Rate(%) Time Total interest Amount Interest Total Through Accrued at Recognized Maturity December 31 January 27 $ 19,000 $ 19,000 $ 19,000 7% 7% 7% 45/360 | 18/360 27/360 1 66S 67 $ 100 S M Lee Note Tomas Co Note >

Answer 1

Tomas Co Note
	Total Through
	Maturity
Principal	$            13,000
Rate (%)	6%
Time	90/360
Total interest	$                  195
H Cheng Note
	Total Through
	Maturity
Principal	$            11,000
Rate (%)	8%
Time	30/360
Total interest	$                    73

Date	General Journal	Debit	Credit
Jan. 27	Cash	19166
	Interest receivable		66
	Interest revenue		100
	Notes receivable		19000
	(To record collection on maturity of note)
Mar. 3	Notes receivable	13000
	Accounts receivable		13000
	(To record acceptance of note receivable)
Mar. 17	Notes receivable	11000
	Accounts receivable		11000
	(To record acceptance of note receivable)
Apr. 16	Accounts receivable	11073
	Notes receivable		11000
	Interest receivable		73
	(To record dishonor of note receivable)
May. 1	Allowance for doubtful accounts	11073
	Accounts receivable		11073
	(To record write off of account)
Jun. 1	Cash	13195
	Notes receivable		13000
	Interest revenue		195
	(To record collection on maturity of note)