Sales and notes receivable transactions The following were selected from among t

Question

Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co, sells and installs home and business security systems. 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 merchandise sold was $14,400 13. Sold merchandise on account to Bradford & co, $60,000. The cost of the merchandise sold was $54,400 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 Bradford &Co; on account. Apr. 3. Received the interested 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. 12. 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 to Halloran Co., $13,500. The cost of the merchandise sold was $8,100. Received from Halloran Co, the amount of the invoice of October 5, less2% discount Instructions Journalize the entries to record the transactions.

Explanation / Answer

Jan. 3 Notes Receivable $18,000                 Cash $18,000 Loaned 18000 cash and recevied 90 day 8% note      Feb. 10-sale Accounts receivable $24,000                 Sales Revenue $24,000 Feb. 10-cost COGS $14,400                Mechandise Inventory $14,400 Sold merchandise on account      Feb. 13-sale Accounts receivable $60,000                 Sales Revenue $60,000 Feb. 13-cost COGS $54,000                Mechandise Inventory $54,000 Sold merchandise on account      Mar. 12 Notes receivable $24,000                Accounts receivables $24,000 Accepted 60 day 7% note on account      Mar. 14 Notes receivable $60,000                Accounts receivables $60,000 Accepted 60 day 9% note on account      Apr. 3 Cash $     360                     Interest revenue $     360 18000 x 8% x 90/360      Notes receivable                     Notes Receivable Issued the new 120day 9% note for the loan due on 3rd Jan      May-11 Cash $24,280                     Notes Receivable $24,000                Interest revenue $     280 Cash received 24000 + Interest = 24000 x 7% x 60/360 May-13 Accounts receivable $60,900                     Notes Receivable $60,000                Interest revenue $     900 Dishonoured note, Interest revenue = 60000 x 60/360 x 9% Jul-12 Cash $62,118                    Accounts receivable $60,900                Interest revenue $ 1,218 Interest revenue = 60900 x 12% x 60/360 Aug. 1 Cash $18,540                     Notes Receivable $18,000                Interest revenue $     540 Cash of $18000 + Interest revenue of 18000 x 9% x 120/360 Oct. 5-sale Accounts receivable $13,500                 Sales Revenue $13,500 Oct. 5-cost COGS $ 8,100                Mechandise Inventory $ 8,100 Sold merchandise on account for $13,500 and cogs 8100      Oct. 15 Cash $13,230                   Cash Discount $     270                 Accounts receivables $13,500 Received cash and offered 2% discount

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