The following were selected from among the transactions completed by Caldemeyer

Question

The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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Chart of Accounts

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Journal

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

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Jan. 3. Loaned $21,600 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford & Co., $25,200. The cost of the merchandise sold was $15,120. 13. Sold merchandise on account to Dry Creek Co., $55,200. The cost of merchandise sold was $49,680. Mar. 12. Accepted a 60-day, 8% note for $25,200 from Bradford & Co. on account. 14. Accepted a 60-day, 9% note for $55,200 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford & Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account to Halloran Co., $14,500, net/30. The cost of the merchandise sold was $8,700. 15. Received from Halloran Co. the amount of the invoice of October 5.

Explanation / Answer

Note:- I have assumed 360 days in year for calculating interest   

Journal Entries (Amounts in $)

Date Description Post Ref. Debit Credit Jan. 3 Notes Receivable 21,600 Cash 21,600 Feb. 10 Accounts Receivable-Bradford & Co. 25,200 Sales 25,200 Feb. 10 Cost of Merchandise Sold 15,120 Merchandise Inventory 15,120 Feb. 13 Accounts Receivable-Dry Creek Co. 55,200 Sales 55,200 Feb. 13 Cost of Merchandise Sold 49,680 Merchandise Inventory 49,680 Mar. 12 Notes Receivable 25,200 Accounts Receivable-Bradford & Co. 25,200 Mar. 14 Notes Receivable 55,200 Accounts Receivable-Dry Creek Co. 55,200 Apr. 3 Notes Receivable 21,600 Cash 432 Notes Receivable 21,600 Interest Revenue ($21,600*8%*90/360) 432 May 11 Cash ($25,200+$336) 25,536 Notes Receivable 25,200 Interest Revenue ($25,200*8%*60/360) 336 May 13 Accounts Receivable-Dry Creek co. ($55,200+$828) 56,028 Notes Receivable 55,200 Interest Revenue ($55,200*9%60/360) 828 July 12 Cash ($56,028+$1,121) 57,149 Accounts Receivable-Dry Creek co. 56,028 Interest Revenue ($56,028*12%*60/360) 1,121 Aug. 1 Cash ($21,600+$648) 22,248 Notes Receivable 21,600 Interest Revenue ($21,600*9%*120/360) 648 Oct. 5 Accounts Receivable-Halloran Co. 14,500 Sales 14,500 Oct. 5 Cost of Merchandise Sold 8,700 Merchandise Inventory 8,700 Oct. 15 Cash 14,500 Accounts Receivable-Halloran Co. 14,500

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