Preparing general journal adjusting entries:
1. The annual provision for bad debt is recorded as 5% of ending A/R (317,420). Use the allowance method. Round to the nearest $1.
2. The interest revenue accrued to Dec. 31 of this year on notes receivable is composed of the following:
ben Kenobi, Inc. $3,250
Yoda, Inc. 92
R2D2 Computers 91
3. Interest has accrued at 6.5% on the long-term notes payable (1,200,000) since July 1 of this year.
4.The sic month interest payment on the bonds payable (500,000) is due Jan. 3 of next year for the si-month period ended on Dec. 31 of this year. The stated (coupon) rate of interest is 10% annually. The market (yield -to-maturity) rate of interest is 12% annually. There were 10 years to maturity at June 30th of this year (the last interest payment date). The bonds are semi-annual. Record interest expense and discount amortization at Dec. 31.