The December 31, 2012 financial statements of Pure Air Works (PAW)show $125,000 for "Note receivable." You learn that the company provided cash of $125,000 to a customer (a new chain of hotdog stands)in exchange for a promissory note.
The note was issued on January 1, 2011, bearing interest at 7% per year (which approximates the market interest rate), with principal and interest (total $133,750)due on January 1, 2012.
However, the hotdog chain has had numerous delays obtaining the required licenses to operate on street corners.
Consequently, on January 1, 2012, the chain and PAW renegotiated the promissory note so that the $133,750 in principal and interest would come due on January 1, 2014. Aside from the initial recording of the note receivable on January 1, 2011, PAW has not recorded any other journal entries relating to this note.
Present the necessary journal entries to correct PAW's accounts in 2011 and 2012. Round all values to the nearest dollar.

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The Answer of The December 31, 2012 financial statements of Pure Air Works (PAW)show $125,000 for "Note receivable." You learn that the company provided cash of $125,000 to a customer (a new chain of hotdog stands)in exchange for a promissory note.
The note was issued on January 1, 2011, bearing interest at 7% per year (which approximates the market interest rate), with principal and interest (total $133,750)due on January 1, 2012.
However, the hotdog chain has had numerous delays obtaining the required licenses to operate on street corners.
Consequently, on January 1, 2012, the chain and PAW renegotiated the promissory note so that the $133,750 in principal and interest would come due on January 1, 2014. Aside from the initial recording of the note receivable on January 1, 2011, PAW has not recorded any other journal entries relating to this note.
Present the necessary journal entries to correct PAW's accounts in 2011 and 2012. Round all values to the nearest dollar.

The December 31, 2012 Financial Statements of Pure Air Works