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Ch 8 Homework Exercises eBook Show Me How Calculator Entries for Receipt and Dishonor of Notes Receivable Journalize the following transactions in the accounts of Missouri Gaming Co, which operates a riverboat casino. Assume 360 days in a year. If an amount box does not require an entry, leave it blank. Round final answers to the nearest cent when necessary Mar. 29. Received a $64,800, 60-day, 8% note dated March 29 from Kane Platt on account. Apr. 30. Received a $16,800, 60-day, 6% note dated April 30 from Jon Kelly on account. May 28. The note dated March 29 from Karie Platt is dishonored, and the customer's account is charged for the note, including interest. June 29. The note dated April 30 from Jon Kelly is dishonored, and the customer's account is charged for the note, including interest. Aug. 26. Cash is received for the amount due on the dishonored note dated March 29 plus interest for 90 days at 6% on the total amount debited to Kane Patt on Hay 28 Oct. 22. Wrote off against the allowance account the amount charged to Jon Kelly on June 29 for the dishonored note dated Apmil 30. Mar. 29 Notes Receivable 64.800 64,800 Apr. 30 Notes Recervable Y 16,800 Accounts Receivable-Jon Kelly 16.800 Accounts Receivable Karie Platt May 28 Notes Receivable |v' | 64,800| Interest Reveue 864V Accounts Receivable Jon Kelly 16.968 : June 29 Notes Receiveble V16,800 Previous Check ty Work 3 more Check My Work uses remaining Save and Exit Submit for Greding Assignment Score: 99.63% 0:05 PM 4/28/2013 ^

Explanation / Answer

Required Journals are as below:

Date

Account titles and explanations

P.ref

Debit

Credit

29/03

Notes receivable

64,800

Accounts receivable – K.P

64,800

To record receiving notes on account

30/04

Notes receivable

16,800

Accounts receivable – J.K

16,800

To record receiving notes on account

28/03

Accounts receivable – K.P

65,664

Notes receivable

64,800

Interest revenue [64,800 × 8% × (60 days / 360 days]

864

To record dishonor of notes on the due date

29/06

Accounts receivable – K.P

16,968

Notes receivable

16,800

Interest revenue [16,800 × 6% × (60 days / 360 days]

168

To record dishonor of notes on the due date

26/08

Cash

66,648.96

Accounts receivable – K.P

65,664

Interest revenue [65,664 × 6% × (90 days / 360 days)]

984.96

To record receiving cash including interest

22/10

Allowance for doubtful accounts

16,968

Accounts receivable – K.P

16,968

To record write off of uncollectibles

1.

The amount of adjusting entry = Credit sales × 1% × ¼

                                                = $3,150,000 × 1% × ¼

                                                = $7,875

2.

Balances:

Accounts receivable = $700,000

Allownace account = Unadjusted credit balance + Adjusted amount

                                = $6,500 + $7,875

                              = $14,375

Bad debts = The adjusted amount only

                  = $7,875

3.

Net value = Accounts receivable – Allownace amount

                 = $700,000 - $14,375

                 = $685,625

Date

Account titles and explanations

P.ref

Debit

Credit

29/03

Notes receivable

64,800

Accounts receivable – K.P

64,800

To record receiving notes on account

30/04

Notes receivable

16,800

Accounts receivable – J.K

16,800

To record receiving notes on account

28/03

Accounts receivable – K.P

65,664

Notes receivable

64,800

Interest revenue [64,800 × 8% × (60 days / 360 days]

864

To record dishonor of notes on the due date

29/06

Accounts receivable – K.P

16,968

Notes receivable

16,800

Interest revenue [16,800 × 6% × (60 days / 360 days]

168

To record dishonor of notes on the due date

26/08

Cash

66,648.96

Accounts receivable – K.P

65,664

Interest revenue [65,664 × 6% × (90 days / 360 days)]

984.96

To record receiving cash including interest

22/10

Allowance for doubtful accounts

16,968

Accounts receivable – K.P

16,968

To record write off of uncollectibles

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