Following are selected transactions Danica Company for 2014.

Dec.	13	Accepted a $17,000, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable.
	31	Prepared an adjusting entry to record the accrued interest on the Lee note.

First, complete the table below to calculate the interest amounts at December 31^st. (Do not round intermediate calculations. Use 360 days a year.)

		Interest
	Total Through	Recognized
	Maturity	December 31
Principal
Rate (%)
Time
Total interest

Use the calculated value to prepare your journal entries.

1.

Record acceptance of a $17,000, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable.

2.

Prepare an adjusting entry to record the accrued interest on the Lee note.