Question

february 14 received todds payment of principal and interest on the note dated december 16. march 2 accepted a(n) $7,500, 7%, 90 - day note in granting a time extension on the past - due account receivable from midnight company. march 17 accepted a $3,800, 30 - day, 7% note in granting ava privet a time extension on a past - due account receivable. april 16 privet dishonored the note. may 31 midnight company dishonored its note. august 7 accepted a(n) $8,350, 90 - day, 10% note in granting a time extension on the past - due account receivable of mulan company. september 3 accepted a $3,410, 60 - day, 10% note in granting noah carson a time extension on a 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. complete this question by entering your answers in the tabs below. required 1a required 1b required 1c required 1d required 2 use those calculated values to prepare your journal entries for year 2 transactions. journal entry worksheet < 1 2 3 4 5 6 7 8 9 10 > privet dishonored the note. note: enter debits before credits. date general journal debit credit april 16 accounts receivable—a. privet 3,800 interest receivable notes receivable—a. privet interest revenue

Explanation:

Step1: Calculate interest on Ava Privet's note

The principal of Ava Privet's note is $P = 3800$, the annual - interest rate $r=7\%=0.07$, and the time $t = \frac{30}{360}$ (assuming a 360 - day year for simple - interest calculations in business). The simple - interest formula is $I = Prt$. So, $I=3800\times0.07\times\frac{30}{360}\approx22.17$.

Step2: Record journal entry for dishonored note

When Ava Privet dishonored the note, we need to transfer the note and the interest due to accounts receivable.

• Debit Accounts Receivable - A. Privet for the principal plus interest: $3800 + 22.17=3822.17$.
• Credit Notes Receivable - A. Privet for the principal amount of $3800$.
• Credit Interest Receivable for the $22.17$ of interest that was already accrued.

The journal entry for April 16 when Privet dishonored the note is:

Date	General Journal	Debit	Credit
	Notes Receivable - A. Privet		$3800$
	Interest Receivable		$22.17$

Answer:

Date	General Journal	Debit	Credit
	Notes Receivable - A. Privet		$3800$
	Interest Receivable		$22.17$