1. To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants under formal contracts, provided that they use it to renovate their store space. On November 1, 2020, the company loaned $93,000 to new tenants on one-year notes with stated annual interest rates of 10 percent. Interest is to be received by Marketplace Mall on April 30, 2021, and at maturity on October 31, 2021.

Required:

Prepare journal entries that Marketplace Mall would record related to these notes on the following dates: (a) November 1, 2020; (b) December 31, 2020 (Marketplace Malls fiscal year-end); (c) April 30, 2021; and (d) October 31, 2021. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

2.

Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three time periods as follows: (1) 1 to 30 days old, $12,700; (2) 31 to 90 days old, $5,700; and (3) more than 90 days old, $3,700. For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be (1) 5 percent, (2) 10 percent, and (3) 15 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance was $870 (credit) before the end-of-period adjusting entry is made.

Required:

1. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts.

2. What amount of Bad Debt Expense should be recorded on December 31?

3. If the unadjusted balance in the Allowance for Doubtful Accounts was a $670 debit balance, what amount of Bad Debt Expense should be recorded on December 31?

3.

Prior to recording the following, Elite Electronics, Incorporated, had a credit balance of $1,300 in its Allowance for Doubtful Accounts.

Required:

Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. On August 31, a customer balance for $230 from a prior year was determined to be uncollectible and was written off.
2. On December 15, the customer balance for $230 written off on August 31 was collected in full.