Question

Exercise 8-16 Dishonouring a note L04 Prepare journal entries to record these transactions Mar. Sept. Dec 21 Accepted a $6,200, six-month, 4% note dated today from Bradley Brooks in granting a time extension on his past-due account 21 Brooks dishonoured his note when presented for payment. 31 After exhausting all legal means of collection, wrote off Brooks's account against the Allowance for Doubtful Accounts.

Answer 1

Ex. 8-16
Date	Account title	Debit	Credit
21-Mar	4% Note receivable	6200
	Accounts receivable		6200
21-Sep	Accounts receivable(6200+124)	6324
	4% Note receivable		6200
	Interest revenue(6200*4%*6/12)		124
31-Dec	Allowance for Doubtful Accounts	6324
	Accounts receivable		6324
Ex 8.17
31-Oct	4.5% Note receivable	15000
	Accounts receivable		15000
31-Dec	Interest receivable	112.50
	Interest revenue		112.50
	(15000*4.5%*2/12)
30-Apr	Cash(15000+(15000*4.5%*6/12))	15337.50
	4.5% Note receivable		15000
	Interest receivable		112.5
	Interest revenue(15000*4.5%*4/12)		225