A the note is accepted by recroom on november 1 2008

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a. The note is accepted by RecRoom on November 1, 2008, causing the company to increase its notes receivable and decrease its accounts receivable. Acc 2013 Exam 2 Boot Camp Page 3 of 10
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b. RecRoom adjusts its records for interest earned to December 31, 2008. c. RecRoom receives the principal and interest on the note’s maturity date. a) b) c) E8-11 (adapted) Recording Note Receivable Transactions To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants under formal contracts, provided that they use it to renovate their store space. On July 1, 2008, the company loaned $100,000 to a new tenant on a one-year note with a stated annual interest rate of 6 percent. Interest is to be received by Marketplace Mall on October 31, 2008, February 28, 2009. All principal and any remaining interest will be collected upon maturity on June 30, 2009 Required: Prepare journal entries that Marketplace Mall would record related to this note on the following dates: ( a ) July 1, 2008; (b) October 31, date of first interest payment ( c) December 31, 2008 (Marketplace Mall's fiscal year-end); ( d ) February 28, 2009; and ( e ) June 30, 2009. 11/1/08 10/31/08 12/31/08 2/28/09 6/30/09 Chapter 8 Bad debt m. estimation n. Write off o. Recovery E8-3 Recording Write-Offs, Recoveries, and Bad Debt Expense Estimates Using the Aging of Receivables Method Prior to recording the following, Elite Electronics, Incorporated had a credit balance of $2,000 in its Allowance for doubtful accounts. Required: Acc 2013 Exam 2 Boot Camp Page 4 of 10
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Prepare journal entries for each transaction. a. On August 31, 2008, a customer balance for $300 from a prior year was determined to be uncollectible and was written off. b. On December 15, 2008, the customer balance for $300 written off on August 31, 2008, was collected in full. a. Based on an aging of accounts receivable, the company determined that the December 31 balance in the allowance for doubtful accounts should be $5,600. On December 31, 2008, the appropriate bad debt adjustment was recorded. a) b) c) E8-4 Determining Financial Statement Effects of Write-Offs, Recoveries, and Bad Debt Expense Estimates Using the following categories, indicate the effects of the transactions listed in E7-3. Use + for increase and – for decrease and indicate the accounts affected and the amounts. Assets = Liabilities CC RE a) b) c) 2. Do you know how to do the calculations for a. Net Accounts Receivable E8-5 (Adapted) Computing Bad Debt Expense Using Aging of Accounts Receivable Method Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more than 60 days are considered old and have a 35% uncollectible rate. Required: 1. If YOC has $10,000 of young accounts and $40,000 of old accounts, how much should be reported in the Allowance for doubtful accounts? _______________________________ Alternative: What is the net accounts Receivable? ________________________ List Components 2. If YOC's Allowance for doubtful accounts currently has an unadjusted credit balance of $4,000, how much should be credited to the account? (AKA What is bad debt expense?) ________________ Alternative: Record the adjusting entry Acc 2013 Exam 2 Boot Camp Page 5 of 10
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3. If YOC's Allowance for doubtful accounts has an unadjusted debit balance of $500, how much
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