Homework Sourse1 What is the amount of interest revenue that must be accrue
1/ What is the amount of interest revenue that must be accrued on December 31st for a nine-month, 6%, $2,000 note receivable that was accepted on November 1st? Interest Accrued: .......
2/ Manning Company uses the allowance method. At the end of its first year of operations, the company estimates that it will not collect $2,500 of its accounts receivable. Prepare the appropriate adjusting journal entry to establish the estimate for uncollectible accounts
2a/ Record the $2,500 estimate of accounts receivable that will not be collected.
Solution
1. amount of interest accrued = note amount * interest rate *number of months expired till december 31 / 12 months
=>$2,000 * 6% * 2/12
=>$20.
interest accrued = $20.
2.
| 2a | Bad debt expense a/c | $2,500 | |
| ..............To Allowance for doubtful accounts a/c | $2,500 | ||
