Problem 9-7A On January 1, 2017, Harter Company had Accounts Receivable $130,800

Question

Problem 9-7A On January 1, 2017, Harter Company had Accounts Receivable $130,800, Notes Recelvable $32,400, and Allowance for Doubtful Accounts $20,600. The note receivable is from Willingham Company. It is a 4-month 8% note dated December 31, 2016. Harter Company prepares financial statements annually at December 31. During the year, the following selected transactions occurred Jan. 5 Sold $26,800 of merchandise to Sheldon Company, terms r/15 20 Accepted Sheldon Company's $26,800, 3-month, 79% note for balance due. Feb. 18 Sold $15,400 of merchandise to Patwary Company and accepted Patery's $15,400, 6-month, 8% note for the amount due. Apr. 20 Collected Sheldon Company note in full 30 Received payment in full from Willingham Company on the amount due. May 25 Accepted Potter Inc.'s $13,400, 3-month, 8% note in settlement or a past-due balance on account. Aug. 18 Received payment in full from Patwary Company on note due The Potter Inc. note was dishonored. Potter Inc, is not bankrupt, future payment is anticipated. Sold $11,400 of merchandise to Stanbrough Company and accepted a $11,400, 6-month, 9% note for the amount due. 25 Sept. 1

Explanation / Answer

Date

Account Titles & Explanation

Debit

Credit

Jan. 5

Accounts Receivable

$26800

      Sales Revenue

$26800

(For recording sales to Sheldon company)

Jan. 20

Notes Receivable

$26800

      Accounts Receivable

$26800

(For recording receipt of notes receivable)

Feb. 18

Notes Receivable

$15400

      Sales Revenue

$15400

(For recording sales to Patwary company)

April 20

Cash

$27269

      Notes Receivable

$26800

      Interest Revenue ($26800 * 0.07 * 3 / 12)

$469

(For recording receipts of amount of notes receivable)

April 30

Cash

$33264

      Notes Receivable

$32400

      Interest Revenue ($32400 * 0.08 * 4 / 12)

$864

(For recording receipts of amount of notes receivable)

May 25

Notes Receivable

$13400

      Accounts Receivable

$13400

(For recording receipt of notes receivable from Potter Inc.)

Aug. 18

Cash

$16016

      Notes Receivable

$15400

      Interest Revenue ($15400 * 0.08 * 6 / 12)

$616

(For recording receipts of amount of notes receivable)

Aug. 25

Accounts Receivable

$13668

      Notes Receivable

$13400

      Interest Revenue ($13400 * 0.08 * 3 / 12)

$268

(For recording dishonoured of notes receivable)

Sep. 1

Notes Receivable

$11400

      Sales Revenue

$11400

(For recording sales to Stanbrough company)

Date

Account Titles & Explanation

Debit

Credit

Jan. 5

Accounts Receivable

$26800

      Sales Revenue

$26800

(For recording sales to Sheldon company)

Jan. 20

Notes Receivable

$26800

      Accounts Receivable

$26800

(For recording receipt of notes receivable)

Feb. 18

Notes Receivable

$15400

      Sales Revenue

$15400

(For recording sales to Patwary company)

April 20

Cash

$27269

      Notes Receivable

$26800

      Interest Revenue ($26800 * 0.07 * 3 / 12)

$469

(For recording receipts of amount of notes receivable)

April 30

Cash

$33264

      Notes Receivable

$32400

      Interest Revenue ($32400 * 0.08 * 4 / 12)

$864

(For recording receipts of amount of notes receivable)

May 25

Notes Receivable

$13400

      Accounts Receivable

$13400

(For recording receipt of notes receivable from Potter Inc.)

Aug. 18

Cash

$16016

      Notes Receivable

$15400

      Interest Revenue ($15400 * 0.08 * 6 / 12)

$616

(For recording receipts of amount of notes receivable)

Aug. 25

Accounts Receivable

$13668

      Notes Receivable

$13400

      Interest Revenue ($13400 * 0.08 * 3 / 12)

$268

(For recording dishonoured of notes receivable)

Sep. 1

Notes Receivable

$11400

      Sales Revenue

$11400

(For recording sales to Stanbrough company)

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