he following transactions are from Ohlm Company. (Use 360 days a year.) Year 1 December 16 Accepted a(n) $10,300, 60-day, 6% note in granting Danny Todd a time extension on his past-due account receivable. December 31 Made an adjusting entry to record the accrued interest on the Todd note. Year 2 February 14 Received Todds payment of principal and interest on the note dated December 16. March 2 Accepted a(n) $7,200, 6%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company. March 17 Accepted a $3,900, 30-day, 7% note in granting Ava Privet a time extension on her past-due account receivable. April 16 Privet dishonored her note. May 31 Midnight Company dishonored its note. August 7 Accepted a(n) $7,250, 90-day, 11% note in granting a time extension on the past-due account receivable of Mulan Company. September 3 Accepted a $2,640, 60-day, 8% note in granting Noah Carson a time extension on his past-due account receivable. November 2 Received payment of principal plus interest from Carson for the September 3 note. November 5 Received payment of principal plus interest from Mulan for the August 7 note. December 1 Wrote off the Privet account against the Allowance for Doubtful Accounts.

Required: 1-a. First, complete the table below to calculate the interest amount at December 31, Year 1. 1-b. Use the calculated value to prepare your journal entries for Year 1 transactions. 1-c. First, complete the table below to calculate the interest amounts. 1-d. Use those calculated values to prepare your journal entries for Year 2 transactions. 2. If Ohlm pledged its receivables as security for a loan from the bank, where on the financial statements does it disclose this pledge of receivables?

• Required 1A
• Required 1B
• Required 1C
• Required 1D

First, complete the table below to calculate the interest amount at December 31, Year 1.

1a.

	Total Through Maturity	Interest Recognized December 31
Principal	$10,300	$10,300
Rate (%)	6%	6%
Time	60/360	15/360
Total interest

1b.

Use the calculated value to prepare your journal entries for Year 1 transactions. (Do not round intermediate calculations.)

No	Date	General Journal	Debit	Credit
1	December 16	Notes receivableD. Todd	10,300
		Accounts receivableD. Todd		10,300
2	December 31	Interest receivable
		Interest revenue

• Required 1C

First, complete the table below to calculate the interest amounts. (Do not round intermediate calculations.)

	Total Through Maturity
	Midnight Company Note - March 2, Year 2	A. Privet Note - March 17, Year 2	Mulan Note - August 7, Year 2	N. Carson Note - September 3, 2017
Principal	$7,200	$3,900	$7,250	$2,640
Rate (%)	6%	7%	11%	8%
Time	90/360	30/360	90/360	60/360
Total interest		$23	$199	$35

• Required 1D

Use those calculated values to prepare your journal entries for Year 2 transactions.

No	Date	General Journal	Debit	Credit
1	February 14	Cash
		Interest revenue
		Notes receivableD. Todd
		Interest receivable
2	March 02	Notes receivableMidnight Company	7,200
		Accounts receivableMidnight Company		7,200
3	March 17	Notes receivableA. Privet	3,900
		Accounts receivableA. Privet		3,900
4	April 16	Accounts receivableA. Privet	3,923
		Notes receivableA. Privet		3,900
		Interest revenue		23
5	May 31	Accounts receivableMidnight Company
		Interest revenue
		Notes receivableMidnight Company
6	August 07	Notes receivableMulan	7,250
		Accounts receivableMulan		7,250
7	September 03	Notes receivableN. Carson	2,640
		Accounts receivableN. Carson		2,640
8	November 02	Cash
		Interest revenue
		Notes receivableN. Carson
9	November 05	Cash	7,449
		Interest revenue
		Notes receivableMulan
10	December 01	Allowance for doubtful accounts	3,923
		Accounts receivableA. Privet		3,923