Question

exercise 9 - 20 (algo) honoring a note lo p4
following are transactions for vitalo company.
november 1 accepted a $15,000, 180 - day, 8% note from kelly white in granting a time extension on her past - due account receivable.
december 31 adjusted the year - end accounts for the accrued interest earned on the white note.
april 30 white honored her note when presented for payment.
complete the table to calculate the interest amounts at december 31st and april 30th and use those calculated values to prepare your journal entries.
note: do not round intermediate calculations. use 360 days a year.
complete this question by entering your answers in the tabs below.
interest amounts general journal
complete the table to calculate the interest amounts at december 31st and april 30th.
interest calculated through maturity date interest calculated through december 31 interest calculated from january 1 through maturity date
principal
rate (%)
time
total interest

Explanation:

Step1: Identify principal, rate and time - related values

Principal ($P$) = $\$15000$, Rate ($r$) = $8\%=0.08$.

Step2: Calculate time periods

From November 1 to December 31: $t_1 = 61$ days. From January 1 to April 30: $t_2=120$ days. From November 1 to April 30: $t_3 = 180$ days.

Step3: Calculate interest through maturity date

Using the simple - interest formula $I = Prt$, where $t$ is in years. For the period from November 1 to April 30 ($t_3=\frac{180}{360}$ years), $I_3=Prt_3=15000\times0.08\times\frac{180}{360}=\$600$.

Step4: Calculate interest through December 31

For the period from November 1 to December 31 ($t_1=\frac{61}{360}$ years), $I_1 = Prt_1=15000\times0.08\times\frac{61}{360}\approx\$203.33$.

Step5: Calculate interest from January 1 through maturity date

$I_2=I_3 - I_1=600 - 203.33=\$396.67$.

Answer:

	Interest calculated through maturity date	Interest calculated through December 31	Interest calculated from January 1 through maturity date
Rate ($\%$)	$8\%$	$8\%$	$8\%$
Time	$\frac{180}{360}$	$\frac{61}{360}$	$\frac{120}{360}$
Total interest	$\$600$	$\$203.33$	$\$396.67$