Assign_5_-_Solutions_to_Practice_Problem

Interest revenue 1350 ex 822 2011 dec 10 notes

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Interest Revenue ................................................... 1,350 Ex. 8–22 2011 Dec. 10 Notes Receivable .................................................. 36,000 Accounts Receivable—Point Loma Clothing & Bags Co. ................................... 36,000 31 Interest Receivable ............................................... 84 Interest Revenue ............................................. 84 Accrued interest. ($36,000 × 0.04 × 21/360 = $84) 31 Interest Revenue ................................................... 84 Income Summary ............................................. 84 2012 Mar. 9 Cash ...................................................................... 36,360 Notes Receivable ............................................. 36,000 Interest Receivable .......................................... 84 Interest Revenue ............................................. 276* *$36,000 × 0.04 × 69/360 Ex. 8–25 1. The interest receivable should be reported separately as a current asset. It should not be deducted from notes receivable. 2. The allowance for doubtful accounts should be deducted from accounts receivable. A corrected partial balance sheet would be as follows: TULIPS COMPANY Balance Sheet December 31, 2012 Assets Current assets: Cash .............................................................................. $138,000 Notes receivable ............................................................ 400,000 Accounts receivable ...................................................... $795,000 Less allowance for doubtful accounts ...................... 14,500 780,500 Interest receivable ......................................................... 20,000
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