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 during the current year by Danix Co., an appliance wholesale company:

Required:

Journalize the entries to record the transactions. Assume 360 days in a year. For a compound entry, if an amount box does not require an entry, leave it blank.

Jan. 21. Sold merchandise on account to Black Tie Co., $29,400. The cost of merchandise sold was $17,640. Mar. 18. Accepted a 60-day, 6% note for $29,400 from Black Tie Co. on account. May 17. Received from Black Tie Co. the amount due on the note of March 18. June 15. Sold merchandise on account to Pioneer Co. for $12,300. The cost of merchandise sold was $7,380. 21. Loaned $12,000 cash to JR Stutts, receiving a 30-day, 8% note. 25. Received from Pioneer Co. the amount due on the invoice of June 15. July 21. Received the interest due from JR Stutts and a new 60-day, 9% note as a renewal of the loan of June 21. (Record both the debit and the credit to the notes receivable account.) Sept. 19. Received from JR Stutts the amount due on her note of July 21. 22. Sold merchandise on account to Wycoff Co., $20,000. The cost of merchandise sold was $12,000. Oct. 14. Accepted a 60-day, 6% note for $20,000 from Wycoff Co. on account. Nov. 13. Wycoff Co. dishonored the note dated October 14. Dec. 28. Received from Wycoff Co. the amount owed on the dishonored note, plus interest for 15 days at 12% computed on the maturity value of the note.

Explanation / Answer

Date Account Description Debit Credit 21-Jan Black Tie Co    29,400.00 To Sales    29,400.00 (Being Goods Sold) 21-Jan Cost of Goods Sold    17,640.00 Purchases    17,640.00 (Being cost of goods transferred from purchases) 18-Mar 6% Note    29,400.00 Black Tie Co    29,400.00 (Being 6 % note received against Dues) 17-May Cash    29,694.00 6% Note    29,400.00 To Interest Revenue          294.00 (Being payment Received from Black Tie Co.) 15-Jun Pioneer Co    12,300.00 To Sales    12,300.00 (Being Goods Sold) 15-Jun Cost of Goods Sold      7,380.00 Purchases      7,380.00 (Being cost of goods transferred from purchases) 21-Jun 8% Note    12,000.00 Cash    12,000.00 (Being Loaned $12,000 cash to JR Stutts) 25-Jun Cash    12,300.00 Pioneer Co    12,300.00 (Being Received from Pioneer Co. the amount due on the invoice) 21-Jul Cash            80.00 9% Note    12,000.00 8% Note    12,000.00 Interest Revenue            80.00 (Being New Note issued to JR Stutts and Interest Received on old Note) 19-Sep Cash    12,180.00 9% Note    12,000.00 Interest Revenue          180.00 (Received from JR Stutts) 22-Sep Wycoff Co    20,000.00 Sales    20,000.00 (Being Goods Sold) 22-Sep Cost of Goods Sold    12,000.00 Purchases    12,000.00 (Being cost of goods transferred from purchases) 14-Oct 6% Note    20,000.00 Wycoff Co    20,000.00 (Being Note Received Against Dues) 13-Nov Wycoff Co    20,200.00 6% Note    20,000.00 Interest Revenue          200.00 (Being Wycoff Co. dishonoured the note dated October 14) 28-Dec Cash    20,301.00 Wycoff Co    20,200.00 Interest Revenue          101.00 Being Received from Wycoff Co. the amount owed on the dishonoured note plus Interest)

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