QUESTION 1 C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2018, to advance Jeff $25,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2019. CSM prepares financial statements on June 30 and December 31.

Prepare the journal entry CSM will make when the note is established, accrue interest on June 30 and December 31, and the interest and principal payments on February 28, 2019.

record the receipt of a note of February 28, 2018 for a 25,000 loan to an employee

record the interest accrued on the note as of June 30, 2018

records he interest accrued on the note as of December 31,2018

record the receipt of the payment of interest for the period ending February 28, 2019

record the receipt of the payment for the principal on the nates maturity date

QUESTION 2

Web Wizard, Inc., has provided information technology services for several years. For the first two months of the current year, the company has used the percentage of credit sales method to estimate bad debts. At the end of the first quarter, the company switched to the aging of accounts receivable method. The company entered into the followingpartiallist of transactions during the first quarter.

1. During January, the company provided services for $35,000 on credit.
2. On January 31, the company estimated bad debts using 2 percent of credit sales.
3. On February 4, the company collected $17,500 of accounts receivable.
4. On February 15, the company wrote off a $100 account receivable.
5. During February, the company provided services for $25,000 on credit.
6. On February 28, the company estimated bad debts using 2 percent of credit sales.
7. On March 1, the company loaned $3,000 to an employee, who signed a 6% note, due in 6 months.
8. On March 15, the company collected $100 on the account written off one month earlier.
9. On March 31, the company accrued interest earned on the note.
10. On March 31, the company adjusted for uncollectible accounts, based on an aging analysis (below). Allowance for Doubtful Accounts has an unadjusted credit balance of $1,150.

CustomerTotal0-3031-6061-90Over 90

Alabama Tourism$200$100$80$20

Bayside Bungalows350$350

Others (not shown to save space)16,0006,3007,9001,000800

Xciting Xcursions400400

Total Accounts Receivable$16,950$6,800$7,980$1,020$1,150

Estimated Uncollectible (%)3%15%20%40%