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The following data relate to notes receivable and interest forOwens Co., a financial services company. (All notes are dated as ofthe day they are received.)
Mar.8. Received a $33,000,5%, 60-day note on account. 31. Received an$80,000, 7%, 90-day note on account. May7. Received $33,275 onnote of March 8. 16. Received a $72,000,7%, 90-day note on account. June11. Received a $36,000,6%, 45-day note on account. 29. Received $81,400 onnote of March 31. July26. Received $36,270 onnote of June 11. Aug.4. Received a $48,000,9%, 120-day note on account. 14. Received $73,260 onnote of May 16. Dec.2. Received $49,440 onnote of August 4.
Journalize the entries to record the transactions. Refer to theChart of Accounts for exact wording of account titles.
The following data relate to notes receivable and interest forOwens Co., a financial services company. (All notes are dated as ofthe day they are received.)
| Mar.8. | Received a $33,000,5%, 60-day note on account. |
| 31. | Received an$80,000, 7%, 90-day note on account. |
| May7. | Received $33,275 onnote of March 8. |
| 16. | Received a $72,000,7%, 90-day note on account. |
| June11. | Received a $36,000,6%, 45-day note on account. |
| 29. | Received $81,400 onnote of March 31. |
| July26. | Received $36,270 onnote of June 11. |
| Aug.4. | Received a $48,000,9%, 120-day note on account. |
| 14. | Received $73,260 onnote of May 16. |
| Dec.2. | Received $49,440 onnote of August 4. |
Journalize the entries to record the transactions. Refer to theChart of Accounts for exact wording of account titles.
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Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Assume this is a year in which February has 28 days.
| Jan. 3 | Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. |
| Feb. 10 | Sold merchandise on account to Bradford & Co., $24,000. The cost of the goods sold was $14,400. |
| 13 | Sold merchandise on account to Dry Creek Co., $60,000. The cost of goods sold was $54,000. |
| Mar. 12 | Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account. |
| 14 | Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account. |
| Apr. 3 | Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) |
| May 11 | Received from Bradford & Co. the amount due on the note of March 12. |
| 13 | Dry Creek Co. dishonored its note dated March 14. |
| July 12 | Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. |
| Aug. 1 | Received from Trina Gelhaus the amount due on her note of April 3. |
| Oct. 5 | Sold merchandise on account, terms 2/10, n/30, to Halloran Co., $13,500. Record the sale net of the 2% discount. The cost of goods sold was $8,100. |
| 15 | Received from Halloran Co. the amount of the invoice of October 5, less 2% discount. |
Record the following transactions for the Scott Company:
| November 4 | Received a $6,500, 90-day, 6% notefrom Michael Timâs in payment of his account. |
| December 31 | Accrued interest on the Timâsnote. |
| February 2 | Received the amount due from Timâson his note. |
Required:
Journalize the abovetransactions. Refer to the Chart of Accounts for exact wording ofaccount titles. Round your answers to two decimalplaces.
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For a business that uses the allowance method of accounting foruncollectible receivables:
Required:
| (a) | Journalize the entries torecord the following: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Record the adjusting entry atDecember 31, the end of the first fiscal year, to record the baddebt expense. The accounts receivable account has a balance of$800,000, and the contra asset account before adjustment has adebit balance of $600. Analysis of the receivables indicatesuncollectible receivables of $18,000.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) | In March of the next year, the$350 owed by Fronk Co. on account is written off asuncollectible.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) | In November of the next year,$200 of the Fronk Co. account is reinstated and payment of thatamount is received.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (4) | In December of the next year,$400 is received on the $600 owed by Dodger Co. and the remainderis written off as uncollectible.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (b) | Redo the entries in steps (2),(3), and (4) assuming the company uses the direct write-offmethod.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
*Refer to the Chart of Accountsfor exact wording of account titles.
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