P9-7A Prepare entries for various receivable transactions . (LO 1, 2, 3, 4) On J
ID: 2489320 • Letter: P
Question
P9-7A
Prepare entries for various receivable transactions.
(LO 1, 2, 3, 4)
On January 1, 2017, Harter Company had Accounts Receivable $139,000, Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Willingham Company. It is a 4-month, 9% note dated December 31, 2016. Harter Company prepares financial statements annually at December 31. During the year, the following selected transactions occurred.
Instructions
Journalize the transactions.
Jan. 5 Sold $20,000 of merchandise to Sheldon Company, terms n/15. 20 Accepted Sheldon Company's $20,000, 3-month, 8% note for balance due. Feb. 18 Sold $8,000 of merchandise to Patwary Company and accepted Patwary's $8,000, 6-month, 9% 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 $6,000, 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 $12,000 of merchandise to Stanbrough Company and accepted a $12,000, 6-month, 10% note for the amount due.Explanation / Answer
Date Accounts Title Dr Cr 5-Jan Accounts Receivable $20000 Sales 20000 20-Jan Notes Receivable 20000 Accounts Receivable 20000 (Being 8% note received for the balance due) 18-Feb Notes Receivable 8000 Sales 8000 (As on the same day note was received for the amount) 20-Apr Cash 20400 Notes Receivable 20000 Interest Income (20000*8%*3/12) 400 (Being amount recived which includes principal and interest amt) 30-Apr Cash 25750 Notes Receivable 25000 Interest Income (25000*9%*4/12) 750 (Being amount recived which includes principal and interest amt) 25-May Notes Receivable 6000 Accounts Receivable 6000 (Being 7% note received for the balance due in settlement) 18-Aug Cash 8360 Notes Receivable 8000 Interest Income (8000*9%*6/12) 360 (Being amount recived which includes principal and interest amt) 25-Aug Allowance for Doubtful debts 6105 Notes Receivable 6000 Interest receivable (6000*3/12*7%) 105 1-Sep Notes Receivable 12000 Sales 12000 (As on the same day note was received for the amount)
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