Problem 8-18A Analyzing and journalizing notes receivable transactions LO6

The following transactions are from Ohlm Company. (Use 365 days a year.)

Year 1

December 16Accepted a $10,800, 60-day, 8% note in granting Danny Todd a time extension on his past-due account receivable.December 31Made an adjusting entry to record the accrued interest on the Todd note.

Year 2

February 14Received Todds payment of principal and interest on the note dated December 16.March 2Accepted a $6,100, 8%, 90-day note in granting a time extension on the past-due account receivable from Midnight Company.March 17Accepted a $2,400, 30-day, 7% note in granting Ava Privet a time extension on her past-due account receivable.April 16Privet dishonored her note.May 31Midnight Company dishonored its note.August 7Accepted a $7,440, 90-day, 10% note in granting a time extension on the past-due account receivable of Mulan Company.September 3Accepted a $2,100, 60-day, 10% note in granting Noah Carson a time extension on his past-due account receivable.November 2Received payment of principal plus interest from Carson for the September 3 note.November 5Received payment of principal plus interest from Mulan for the August 7 note.December 1Wrote 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?