Focus on: Monetary Assets and Liabilities—Module 12
Bank Reconciliation
Accounts Receivable
Net realizable value = Accounts receivable – Allowance for Uncollectible Accounts
Uncollectible Accounts
Allowance Methods—GAAP
Direct Write-off Method—Non-GAAP
Notes Received for Cash
Calculating Payment
Principal amount ÷ Present value factor = Payment amount
Allocating Payments
Payment amount – Interest = Principal reduction
Calculating Interest
Notes Received for Goods or Services
Note Balance
Short term: Amount = Face value
Long term: Amount = Fair value of goods or services
Present value of payments if fair value not known
Journal entry:
Note receivable—Face amount (given) | xxx |
Revenue—Calculated amount |
xxx |
Discount on note receivable ... |
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