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1. The maker of a $6,000, 10%, 120-day note receivable failed to pay the note on the due date of April 30. What accounts should be debited and credited by the payee to record the dishonored note receivable?
2. The note receivable dishonored in Question 1 is paid on May 30 by the maker, plus interest for 30 days, 9%. What entry should be made to record the receipt of the payment?
3. Under what section should accounts receivable be reported on the balance sheet?
4. To reduce its bad debt expense, Adang Inc. decided to quit granting credit to customers. Is this a wise decision by Adang Inc.? Explain.
5. The accounts receivable turnover increased, while the number of days' sales in receivables decreased for the current year for Nackerud Co. Are changes for the current year good or bad? Explain.
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