8) Prepare general journal entries for the following transactions of Norman Comp
ID: 2575078 • Letter: 8
Question
8) Prepare general journal entries for the following transactions of Norman Company, assuming they use the allowance method to account for uncollectible accounts Sold S3.500 of merchandise to Lance Co. receiving an 8%, 90-day, S3 ,500 note. 15 Wrote off $1,500 owed by Guy Co from a previous period sale 30 Received a S 5,000, 6%, 30-day note receivable from James Co. as settlement for its $5,000 account receivable Apr 01 May 30 The note received from James on April 30 was collected in full. Jun 30 Lance Co. was unable to pay the note on the due date. Jul 15 Guy Co. paid $1,000 of the amount written off on April 15Explanation / Answer
Journal Entry Date Pariculars Dr. Amt. Cr. Amt. 1-Apr Accounts Receivable Dr. 3,500 To Sale 3,500 (Record the sales to Lance Co.) 1-Apr Notes Receivable Dr. 3,500 To Accounts Receivable 3,500 (record the Notes received from Lance) 15-Apr Allowance for Doubtful Accounts Dr. 1,500 To Accounts Receivable 1,500 (Records the amount wriiten off from Guy Co.) 30-Apr Notes Receivable Dr. 5,000 To Accounts Receivable 5,000 (record the Notes received from James Co) 30-May Cash Dr. 5,025 To Notes receivable 5,000 To Interest Revenue 25 $5,000 X 6% X 1/12 (Record the cash recd against the note from James) 30-Jun Accounts Receivable Dr. 3,570 To Notes receivable 3,500 To Interest Revenue 70 $3,500 X 8% X 3/12 (Record the Notes not paid by Lance) 15-Jul Accounts Receivable Dr. 1,000 To Allowance for Dountful Accounts 1,000 (Record the amount reinstated from Guy Co.) 15-Jul Cash Dr. 1,000 To Accounts Receivable 1,000 (Record the cash recd. From Guy co.)
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