On December 31, 2020, Helena Company, a California real estate firm, received two $18,000 notes from customers in exchange for services rendered. The 8% note from El Dorado Company is due in nine months, and the 3% note from Newcastle Company is due in five years. The market interest rate for similar notes on December 31, 2020, was 8%. At what amounts should the two notes be reported in Helena’s December 31, 2020, balance sheet?

Note receivable, El Dorado Company	Answer
Note receivable, Newcastle Company	Answer

2. EPPA, an environmental management firm, issued to Dara, a $9,000, 8%, five-year installment note that required five equal annual year-end payments. This note was discounted to yield a 9% rate to Dara. What is the total amount of interest revenue to be recognized by Dara on this note?

Total interest revenue

Answer

3. On July 1, 2020, Lezix Company, a maker of denim clothing, sold goods in exchange for a $90,000, one-year, noninterest-bearing note. At the time of the sale, the market rate of interest was 12% on similar notes. At what amount should Lezix record the note receivable on July 1, 2020?

Note receivable

Answer

4. The records of Quest Company included the following accounts (with normal balances).

Cash sales	$1,080,000
Credit sales	810,000
Balance in accounts receivable, December 31, 2019	162,000
Balance in accounts receivable, December 31, 2020	180,000
Balance in allowance for doubtful accounts, December 31, 2019 (Cr.)	2,700
Accounts written off as uncollectible during 2020	4,500

The company estimates bad debts as 2% of receivables at year-end to be uncollectible.

Prepare the adjusting entry at December 31, 2020, to adjust the allowance for doubtful accounts.

Date	Account Name	Dr.	Cr.
Dec. 31, 2020		Answer	Answer
		Answer	Answer

Answer rating: 100% (QA)

Answers ANSWER1 Notes to be reported in Helenas December 312020 Balance Sheet Notes Receivable El Do... View the full answer