Question

Following are selected transactions for Ridge Company Mar. 21 Accepted a S16, 000, 180-day, 8% note dated March 21 from Tamara Jackson in granting a Sept. 17 Jackson dishonored her note when it is presented for payment. time extension on her past-due account receivable Dec. 31 After exhausting all legal means of collectio n, 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. Round your final answers to nearest whole dollar. Use 360 days a year.) Complete this question by entering your answers in the tabs below. General ournal Amounts Complete the table to calculate the interest amounts at September 17 Principal Rate (%) Total interest General Journal > Prev 1 of 17Next> Next >

Answer 1

1) Total through maturity

Prinicipal = $16000

Rate = 8%

Time = 180/360

Total interest = $640

2)

Date	Accounts title	Dr	Cr
21 mar	Notes receivable - tamra jackson	16000
	To Accounts receivable - tamra jackson		16000
17 Sept	Accounts receivable - tamra jackson	16640
	To Interest revenue [16000 * 8% * 180/360]		640
	To Notes receivable - tamra jackson		16000
31 Dec	Allowacne for doubtful accounts	16640
	To  Accounts receivable - tamra jackson		16640