BA 123 2nd Sem AY 22-23 (Aratea/Magana/Placido)

June 2 Discounted both the Mirrorball and Exile notes with recourse at the bank at 14%.

02-Jun Dr Cash 4,836.62 02-Jun Dr Cash 4,836.62

Cr Recourse obligation 4,836.62 Cr Recourse obligation 4,836.62
Discounted Mirrorball notes at 14% Discounted Mirrorball notes at 14%

02-Jun Dr Interest Receivable 55.47

Cr Interest Income 55.47
To accrue interest for the discounted Mirrorball note

BA 123 2nd Sem AY 22-23 (Aratea/Magana/Placido)

June 2 Discounted both the Mirrorball and Exile notes with recourse at the bank at 14%.

02-Jun Dr Cash 6,899.71 02-Jun Dr Cash 6,899.71

Cr Recourse obligation 6,899.71 Cr Recourse obligation 6,899.71
Discounted Exile notes at 14% Discounted Exile notes at 14%

02-Jun Dr Interest Receivable 34.50

Cr Interest Income 34.50
To accrue interest for the discounted Exile note

BA 123 2nd Sem AY 22-23 (Aratea/Magana/Placido)

Aug. 31 The August bank statement indicated the Exile note had been paid.

31-Aug Dr Recourse obligation 6,899.71 31-Aug Dr Recourse obligation 6,899.71

Dr Loss 34.79 Dr Loss 207.29
Cr Notes Receivable 6,900.00 Cr Notes Receivable 6,900.00
Cr Interest Receivable 34.50 Cr Interest Income 207.00
Discounted note from Exile was paid Discounted note from Exile was paid

BA 123 2nd Sem AY 22-23 (Aratea/Magana/Placido)

Aug. 31 Assigned accounts of ₱60,000 are collected, and the remainder of the loan is repaid,
including interest.

31-Aug Dr Notes payable 69,000.00 31-Aug Dr Notes payable 69,000.00

Dr Interest expense 1,035.00 Dr Interest expense 1,035.00
Cr Cash 70,035.00 Cr Cash 70,035.00
Payment of remaining note balance plus interest Payment of remaining note balance plus interest

31-Aug Dr Accounts Receivable 26,700.00

Cr Accounts Receivable - Assigned 26,700.00
Transfer AR-Assigned back to AR account

BA 123 2nd Sem AY 22-23 (Aratea/Magana/Placido)

Sept. 1 The bank notifies Folklore that Mirrorball defaulted on its note and charges a fee of ₱25.

01-Sep Dr Recourse obligation 4,836.62 01-Sep Dr Recourse obligation 4,836.62

Dr Finance charge 25.00 Dr Finance charge 25.00
Dr Loss 171.38 Dr Loss 171.38
Cr Cash 5,033.00 Cr Cash 5,033.00
Payment of recourse obligation due to Mirrorball defaulting on note Payment of recourse obligation due to Mirrorball defaulting on note

01-Sep Dr Accounts Receivable 5,008.00 01-Sep Dr Accounts Receivable 5,008.00

Cr Notes Receivable 4,800.00 Cr Notes Receivable 4,800.00
Cr Interest Receivable 55.47 Cr Interest income 208.00
Cr Interest income 152.53 To recognize dishonored note of Mirrorball
To recognize dishonored note of Mirrorball

BA 123 2nd Sem AY 22-23 (Aratea/Magana/Placido)