Reference no: EM132808916

Problem 1: Norwood Corp. receives a $7,000, 6-month, 4% note from Zest Corp. in settlement of a past-due accounts receivable. What entry will Norwood Corp. make upon receiving the note?

(a) Notes Receivable.......................................................... 7,140
Accounts Receivable............................................. 7,140

(b) Notes Receivable.......................................................... 7,140
Accounts Receivable............................................. 7,000
Interest Revenue ................................................... 140

(c) Notes Receivable.......................................................... 7,000
Accounts Receivable............................................. 7,000

(d) Notes Receivable.......................................................... 7,000
Interest Receivable....................................................... 140
Accounts Receivable............................................. 7,000
Interest Revenue.................................................... 140

Problem 2: The carrying amount (i.e. NRV) of Accounts Receivable is $19,000 before the write off of a $2,500 uncollectible accounts receivable. What is the carrying amount after the write off?

a) HST Expense.
b) HST Payable.
c) HST Recoverable.
d) No entry debiting HST is needed.