Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following transactions are from Ohlm Company. Note: Use 3 6 0 days a year. Year 1 December 1 6 Accepted a ( n )

The following transactions are from Ohlm Company.
Note: Use 360 days a year.
Year 1
December 16 Accepted a(n) $14,600,60-day, 7% 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) $7,600,7%,90-day note in granting a time extension on the past-due account receivable from Midnight Company.
March 17 Accepted a $2,700,30-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) $7,050,90-day, 11% note in granting a time extension on the past-due account receivable of Mulan Company.
September 3 Accepted a $2,850,60-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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management Accounting And Control

Authors: Don R. Hansen, Maryanne Mowen

2nd Edition

0538864451, 978-0538864459

More Books

Students also viewed these Accounting questions