Notes receivable topic

GUIDELINES IN INPUTTING ANSWERS IN CANVAS: 1. In preparing your journal adjusting entries, use the following chart of accounts and choose the corresponding letter in making your entries Letter Account Title Letter Account Title Letter Account Title A Cash F Machinery Interest Income B Accounts Receivable G Accumulated Depreciation L Gain on Sale of Land Notes Receivable H Land M Loss on Sale of Land D Advances to President 1 Uneamed interest income N Gainen Sale of Machinery E Interest Receivable J Sales 0 Loss on Sale of Machinery 2. If the entry is a compound entry or has multiple debits or credits, the line tems must be arranged in the order shown in the chart of accounts. 3. In order to achieve uniformity in our answers, use the whole continuous present value (PV) factor. However, all computations shall be rounded off to the nearest peso. See below for example or see Illustrative Problem on Notes Receivable 4. Do not put any decimal places in your answers. If the answer is 123,456, inputting 123,456.0 or 123,456.00 will be considered incorrect. 5. It is suggested to input your answers using uppercase letters, but Canvas is not case-sensitive (This is a recent discovery). So if the correct answer is CASH inputting Cash, cash or even CASH, will not invalidate your answer. 6. Canvas ignores any extra spaces at the start or at the end of an answer, but will not ignore extra spaces in the middle of an answer. To address this and avoid issues on unnoticed extra spaces, use the following format in inputting your answers: DR.AccountLetter.Amount.CR.AccountLetter.Amount If the correct answer is Cash 2.000 Accounts Receivable 2,000 You should be inputting: DR.A.2,000.CR.B.2,000 If the correct answer is Cash 56,000 Notes Receivable 50,000 Interest Income 6,000 You should be inputting: DR.A.56,000.CR.C.50,000.CRK6.000 Example for Guideline No 3 Let's have a Feb. 1. 2017, P300,000, non-interest bearing note. P100,000 due Jan. 31 of every year. Effective rate is 13%. The amortization schedule will be as follows: Date Collection Interest Principal PV/Carrying Amount 02-01-2017 P236,115 01-31-2018 100,000 30.695 69,305 166,810 01-31-2019 100,000 21.685 78,315 88.495 01-31-2020 100,000 "11,505 88,495 *88,495 x 13% 11,504.35. The last period interest will be a balancing figure so that the CA at the end will be zero. Periodic Collection P100,000 Multiplied by PV Factor of an annuity of P1 (1-(1.13) 0.13 = 23611525978646 Present Value of Note, Feb. 01, 2017 236,115.2598 -> P 236,115 Interest (02-01-17 to 01-31-18), 236,115 x 13% = 30,694 95-> P 30,695 Principal = Collection of P100,000 - P30,695 = P. 69.305 Carrying Amount 01-31-18 = P236,115 - P89,305 = P.166,810 Interest Income for 2017: (02-01-17 to 12-31-17) 30,695 x 11/12 = 28,137.0833-> P28,137 Interest Income for 2018 This is 30,695 x 1/12 but (01-01-18 to 01-31-18) 30,695 -28,137 2.558 minimizes effects of rounding off (02-01-18 to 12-31-18) 21,685 x 11/12 = 19,877.92 -> 19.878 2 22,436 Note: Round off the components first before adding them. Alternatively, the interest for 01-01-18 to 01-31-18 may also be computed as 30,695 x 1/12 - 2,557.91667 rounded off to P2,558 GUIDELINES IN INPUTTING ANSWERS IN CANVAS: 1. In preparing your journal adjusting entries, use the following chart of accounts and choose the corresponding letter in making your entries Letter Account Title Letter Account Title Letter Account Title A Cash F Machinery Interest Income B Accounts Receivable G Accumulated Depreciation L Gain on Sale of Land Notes Receivable H Land M Loss on Sale of Land D Advances to President 1 Uneamed interest income N Gainen Sale of Machinery E Interest Receivable J Sales 0 Loss on Sale of Machinery 2. If the entry is a compound entry or has multiple debits or credits, the line tems must be arranged in the order shown in the chart of accounts. 3. In order to achieve uniformity in our answers, use the whole continuous present value (PV) factor. However, all computations shall be rounded off to the nearest peso. See below for example or see Illustrative Problem on Notes Receivable 4. Do not put any decimal places in your answers. If the answer is 123,456, inputting 123,456.0 or 123,456.00 will be considered incorrect. 5. It is suggested to input your answers using uppercase letters, but Canvas is not case-sensitive (This is a recent discovery). So if the correct answer is CASH inputting Cash, cash or even CASH, will not invalidate your answer. 6. Canvas ignores any extra spaces at the start or at the end of an answer, but will not ignore extra spaces in the middle of an answer. To address this and avoid issues on unnoticed extra spaces, use the following format in inputting your answers: DR.AccountLetter.Amount.CR.AccountLetter.Amount If the correct answer is Cash 2.000 Accounts Receivable 2,000 You should be inputting: DR.A.2,000.CR.B.2,000 If the correct answer is Cash 56,000 Notes Receivable 50,000 Interest Income 6,000 You should be inputting: DR.A.56,000.CR.C.50,000.CRK6.000 Example for Guideline No 3 Let's have a Feb. 1. 2017, P300,000, non-interest bearing note. P100,000 due Jan. 31 of every year. Effective rate is 13%. The amortization schedule will be as follows: Date Collection Interest Principal PV/Carrying Amount 02-01-2017 P236,115 01-31-2018 100,000 30.695 69,305 166,810 01-31-2019 100,000 21.685 78,315 88.495 01-31-2020 100,000 "11,505 88,495 *88,495 x 13% 11,504.35. The last period interest will be a balancing figure so that the CA at the end will be zero. Periodic Collection P100,000 Multiplied by PV Factor of an annuity of P1 (1-(1.13) 0.13 = 23611525978646 Present Value of Note, Feb. 01, 2017 236,115.2598 -> P 236,115 Interest (02-01-17 to 01-31-18), 236,115 x 13% = 30,694 95-> P 30,695 Principal = Collection of P100,000 - P30,695 = P. 69.305 Carrying Amount 01-31-18 = P236,115 - P89,305 = P.166,810 Interest Income for 2017: (02-01-17 to 12-31-17) 30,695 x 11/12 = 28,137.0833-> P28,137 Interest Income for 2018 This is 30,695 x 1/12 but (01-01-18 to 01-31-18) 30,695 -28,137 2.558 minimizes effects of rounding off (02-01-18 to 12-31-18) 21,685 x 11/12 = 19,877.92 -> 19.878 2 22,436 Note: Round off the components first before adding them. Alternatively, the interest for 01-01-18 to 01-31-18 may also be computed as 30,695 x 1/12 - 2,557.91667 rounded off to P2,558