The following were selected from among the transactions completed during the cur

Question

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., $33,000. The cost of merchandise sold was $19,800. Mar. 18. Accepted a 60-day, 6% note for $33,000 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 $16,300. The cost of merchandise sold was $9,780. 21. Loaned $18,000 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

SOLUTION

Date Account titles and Explanation Debit ($) Credit ($) Jan.21 Accounts Receivable - Black Tie Co. 33,000 Sales 33,000 Cost of Merchandise Sold 19,800 Merchandise Inventory 19,800 Mar.18 Notes Receivable 33,000 Accounts Receivable- Black Tie Co. 33,000 May 17 Cash 33,330 Notes Receivable 33,000 Interest Revenue ($33,000*6%*60/360) 330 June 15 Accounts Receivable - Pioneer Co 16,300 Sales 16,300 Cost of Merchandise Sold 9,780 Merchandise Inventory 9,780 June 21 Notes Receivable 18,000 Cash 18,000 June 25 Cash 16,300 Accounts Receivable - Pioneer Co 16,300 July 21 Notes Receivable 18,000 Cash ($18,000 * 8% * 30/360) 120 Notes receivable 18,000 Interest revenue 120 Sept.19 Cash 18,270 Interest Revenue (($18,000 * 9% * 60/360) 270   Note Receivable - JR Stutts 18,000 Sept.22 Account Receivable - Wycoff Co 20,000 Sales 20,000 Cost of Merchandise Sold 12,000 Inventory 12,000 Oct.14 Note Receivable - Wycoff Co 20,000 Account Receivable - Wycoff Co. 20,000 Nov.13 Accounts Receivable -Wycoff Co 20,200 Notes receivable 20,000 Interest revenue ($20,000*6%*60/360) 200 Dec.28 Cash 20,301 Accounts Receivable - Wycoff Co. 20,200 Interest revenue ($20,200*12%*15/360) 101

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