This case focuses on the following student learning objectives in this module as it relates to the course objectives (CO) described under the Getting Started - About This Course page:

Describe the trade-offs of extending credit.	CO1
Estimate and report the effects of uncollectible accounts.	CO1
Compute and report interest on notes receivables.	CO2, CO3
Compute and interpret the receivables turnover ratio.	CO1
Record bad debts using the direct write-off method.	CO2, CO3

• Consider and respond to the following.

Smith Corporation hired a new product manager and agreed to provide her a $20,000 relocation loan on a six-month, 7 percent note. Prepare journal entries to record the following transactions by Smith Corporation. Rather than use letters to reference each transaction, please use the date of the transaction.

1. The company loans the money on January 1, 2022.

2. The new employee pays Smith the interest owed on the maturity date.

3. The new employee pays Smith the full principal owed on the maturity date.