1. On December 31, Helena Company, a California real estate firm, received two $28,000 notes from customers in exchange for services rendered. The 8% note from El Dorado Company is due in nine months, and the 3% note from Newcastle Company is due in five years. The market rate for similar notes on December 31 was 8%. At what amounts should the two notes be reported in Helenas December 31 balance sheet? Note receivable, El Dorado Company Answer 28,000 Note receivable, Newcastle Company Answer 22,411 2. EPPA, an environmental management firm, issued to Dara, a $14,000, 8%, five-year installment note that required five equal annual year-end payments. This note was discounted to yield a 9% rate to Dara. What is the total interest revenue to be recognized by Dara on this note? Total interest revenue Answer 3. On July 1, Lezix Company, a maker of denim clothing, sold goods in exchange for a $140,000, one-year, noninterest-bearing note. At the time of the sale, the market rate was 12% on similar notes. At what amount should Lezix record the note receivable on July 1? Note receivable Answer 4. The records of Quest Company included the following accounts (with normal balances). Cash sales, current year $1,680,000 Credit sales, current year 1,260,000 Balance in accounts receivable, December 31 prior year 252,000 Dr. Balance in accounts receivable, December 31 current year 280,000 Dr. Balance in allowance for doubtful accounts, December 31 prior year (Cr.) 4,200 Cr. Accounts written off as uncollectible during the current year 7,000 The company estimates bad debts as 2% of receivables at year-end to be uncollectible. Prepare the adjusting entry at December 31 of the current year to adjust the allowance for doubtful accounts. Date Account Name Dr. Cr. Dec. 31 Answer Cash Answer 120 Answer 0 Answer Allowance for Doubtful Accounts Answer 0 Answer 120