CASE C: RECEIVABLE FINANCING In your audit of James Company's receivables for the year ended December 31, 2021, you were able to gather the following information: - The company records all interest income only upon receipt of the interest from the borrower. The balance of interest income for the year was P820,000. - The 10% note was issued by ABC Co. on April 1, 2019 with interest payable annually. The interest payments were made from 2020 to 2021 without any default and the entity is certain that the borrower would be able to honor its commitment. - The 12% note was received on November 1,2020 . The principal of the note is due in 4 equal annual installments beginning November 1, 2021. The borrower was able to make timely payments for 2021 and is expected to make the necessary payments for the next three periods. - The 6% note was dated October 1, 2021 and will mature in 4 months. Because of cash requirements, the client discounted it to a bank without recourse on December 31,2021 for 5%. The entity recorded the receipt of the proceeds by debiting cash and crediting loans payable. Required: (1) Prepare the following side-by-side: (a) Journal entries per client; (b) Journal entries per audit; (c) Proposed adjusting journal entries (2) Show supporting computations for your proposed adjusting journal entries