1. Kohl Company lent $54,500 to Hemingway, Inc, accepting Hemingway's 2-year, $67,756, zero-interest bearing note. The implied interest rate is 11.5%. Prepare Kohl's journal entries for the initial transaction, recognition of interest each year, and the collection of $67,756 at maturity.
2. At the close of its first year of operations, December 31, 20X5, Ming Company had accounts receivable of $1,080,000, after deducting the related allowance for doubtful accounts. During 20X5, the company had charges to bad debt expense of $180,000 and wrote off, as uncollectible, accounts receivable of $80,000. What should the company report on its balance sheet at December 31, 20X5, as accounts receivable before the allowance for doubtful accounts?