ACC 01 Week 11 - Chapter 9 --- P9-3, P9-4, P9-5

PROBLEM 9-5

The following selected transactions are from VP Company:

Dec Accepted a , 90-day, note dated this day granting Aaron Burr a time extension on his account receivable. Made an adjusting entry to record the accrued interest on the Burr note.

Jan Accepted a , 90-day, note dated this day granting George Clinton a time extension on his past-due account receivable.

Feb Received payment of principal plus interest from Burr for the note of December 1.

Apr Clinton dishonored his note when presented for payment. Jun Accepted a , 60-day, note dated this day in granting

Elbridge Gerry a time extension on his past due account. Aug Gerry refuses to pay the note that was due Aug 9. Prepare the journal entry

to charge the dishonored note plus accrued interest to Gerry’s account receivable.

Sep Received payment from Gerry for the maturity value of his dishonored note plus interest for the 50 days past the maturity of the note

Nov Accepted a , 120-day, note dated this day from Daniel Tompkins granting a time extension on his account.

Dec Wrote off the Clinton account against Allowance for Doubtful Accounts. Dec Made an adjusting entry to record accrued interest on the Tompkins note.

Required

1. Prepare journal entries to record these transactions and events.

Check Feb 29, Cr. Interest Revenue Aug 14, Cr. Interest Revenue

6.00%

200$ 320$

6.00%

22,000$ 5.00%

32,000$ 6.00%

9.00%

31

201 0

201 1

20,000$

36,000$

1

16

29

16

31 31

11

28

14

10