2. a. On October 1, 2017, Channel Equipment Company sold a harvesting machine to Jonas 6 Brothers, Inc. In lieu of a cash payment Jonas Brothers gave Channel a 2-year, $120,000, i% interest bearing note (i=last digit of your ID, in case of its 0, consider the second last digit of your ID]. The note required interest to paid annually on October 1. Channel's financial statements are prepared on a calendar-year basis. Required: Assuming Jonas Brothers fulfills all the terms of the note, prepare the necessary journal entries for Channel Equipment Company for the entire term of the note. [No annuity table is required for this requirement] b. Rainbow String Corporation operates in an industry that has a high rate of bad debts. Before 6.5 any year-end adjustments, the balance in Rainbow's Accounts Receivable account was $5,55,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year- end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below: Page 2 of 5 Probability of Days Account Outstanding Amount Collection Less than 16 days $300,000 98 Between 16 and 30 days. 100,000 .90 Between 31 and 45 days 80,000 .85 Between 46 and 60 days 40,000 .80 Between 61 and 75 days 20,000 .55 Over 75 days 15,000 Required: i. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? (Complete the aging schedule) ii. Show how accounts receivable would be presented on the balance sheet. .00 2. a. On October 1, 2017, Channel Equipment Company sold a harvesting machine to Jonas 6 Brothers, Inc. In lieu of a cash payment Jonas Brothers gave Channel a 2-year, $120,000, i% interest bearing note (i=last digit of your ID, in case of its 0, consider the second last digit of your ID]. The note required interest to paid annually on October 1. Channel's financial statements are prepared on a calendar-year basis. Required: Assuming Jonas Brothers fulfills all the terms of the note, prepare the necessary journal entries for Channel Equipment Company for the entire term of the note. [No annuity table is required for this requirement] b. Rainbow String Corporation operates in an industry that has a high rate of bad debts. Before 6.5 any year-end adjustments, the balance in Rainbow's Accounts Receivable account was $5,55,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year- end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below: Page 2 of 5 Probability of Days Account Outstanding Amount Collection Less than 16 days $300,000 98 Between 16 and 30 days. 100,000 .90 Between 31 and 45 days 80,000 .85 Between 46 and 60 days 40,000 .80 Between 61 and 75 days 20,000 .55 Over 75 days 15,000 Required: i. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? (Complete the aging schedule) ii. Show how accounts receivable would be presented on the balance sheet. .00