Cairo Co.uses the allowance method of accounting for uncollectible accounts.Cairo Co.accepted a $5,000,12%,3-month note dated May 16,from Alexandria Co.in exchange for its past-due account receivable.
Required:
Part a.Prepare the journal entry for the receipt of the note on May 16.
Part b.Prepare the journal entries for (1)the receipt of interest and (2)the receipt of the principal balance at maturity on August 14.
Part c.Assume that Alexandria made the interest payment but not the principal payment on August 14.On November 30,Cairo writes off the note when it becomes clear that Alexandria will never pay.Prepare the journal entry to write-off the note receivable.

Question

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The Answer of Cairo Co.uses the allowance method of accounting for uncollectible accounts.Cairo Co.accepted a $5,000,12%,3-month note dated May 16,from Alexandria Co.in exchange for its past-due account receivable.
Required:
Part a.Prepare the journal entry for the receipt of the note on May 16.
Part b.Prepare the journal entries for (1)the receipt of interest and (2)the receipt of the principal balance at maturity on August 14.
Part c.Assume that Alexandria made the interest payment but not the principal payment on August 14.On November 30,Cairo writes off the note when it becomes clear that Alexandria will never pay.Prepare the journal entry to write-off the note receivable.

Cairo CoUses the Allowance Method of Accounting for Uncollectible Accounts