On January 1, 2017, Harter Company had Accounts Receivable $142,400, Notes Recei
ID: 2484225 • Letter: O
Question
On January 1, 2017, Harter Company had Accounts Receivable $142,400, Notes Receivable $42,000, and Allowance for Doubtful Accounts $30,000. The note receivable is from Willingham Company. It is a 4-month, 7% 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 $36,200 of merchandise to Sheldon Company, terms n/15.
20 Accepted Sheldon Company’s $36,200, 3-month, 6% note for balance due.
Feb. 18 Sold $24,600 of merchandise to Patwary Company and accepted Patwary’s $24,600, 6-month, 7% 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 $22,000, 3-month, 7% note in settlement of a past-due balance on account.
Aug. 18 Received payment in full from Patwary Company on note due.
25 The Potter Inc. note was dishonored. Potter Inc. is not bankrupt; future payment is anticipated.
Sept. 1 Sold $12,600 of merchandise to Stanbrough Company and accepted a $12,600, 6-month, 8% note for the amount due.
Journalize the transactions.
Explanation / Answer
Jan. 5 Sold $36,200 of merchandise to Sheldon Company, terms n/15. DR CR Accounts Receivable 36200 Sales 36200 Jan20 Accepted Sheldon Company’s $36,200, 3-month, 6% note for balance due. Notes Receivable 36200 Accounts Receivable 36200 Feb. 18 Sold $24,600 of merchandise to Patwary Company and accepted Patwary’s $24,600, 6-month, 7% note for the amount due. Notes Receivable 24600 Sales 24600 Apr. 20 Collected Sheldon Company note in full. Cash 36924 Notes Receivable 36200 Interest Revenue (36200 x 6% x3/12 724 30 Received payment in full from Willingham Company on the amount due. Cash 42980 Notes Receivable 42000 Interest Revenue (42000x 7% x 4/12) 980 May 25 Accepted Potter Inc.’s $22,000, 3-month, 7% note in settlement of a past-due balance on account. Notes Receivable 22000 Accounts Receivable 22000 Aug. 18 Received payment in full from Patwary Company on note due. Cash 24600 Interest Revenue (24600x 7% x6/12) 861 Notes Receivable 25461 25 The Potter Inc. note was dishonored. Potter Inc. is not bankrupt; future payment is anticipated. Accounts Receivable 22385 Notes Receivable 22000 Interest Revenue =22000*0.07*3/12 385 Sold $12,600 of merchandise to Stanbrough Company and accepted a $12,600, 6-month, 8% note for the amount due. Accounts Receivable 12600 Sales 12600
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