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. Loaned $21,600 cash to Trina Gelhaus, receiving a 90-day, 896 note. Sold merchandise on account to Bradford & Co., $18,600. The cost of the merchandise sold was $11,160. Sold merchandise on account to Dry Creek Co., $61,200. The cost of merchandise sold was $55,080. Accepted a 60-day, 6% note for $18,600 from Bradford & Co. on account. Accepted a 60-day, 996 note for $61,200 from Dry Creek Co. on account. Received the interest due from Trina Gelhaus and a new 120-day, 996 note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) Jan. 3. Feb. 10. 13. Mar. 12, 14. Apr. 3. May 11 Received from Bradford & Co. the amount due on the note of March 12. Dry Creek Co. dishonored its note dated March 14. 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. Received from Trina Gelhaus the amount due on her note of April 3. Sold merchandise on account to Halloran Co., $13,900, net/30. The cost of the merchandise sold was $8,340. Received from Halloran Co. the amount of the invoice of October 5. 13. July 12. Aug. 1. Oct. 5. 15. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles

Explanation / Answer

The following journal entries will be made for the given transactions:

Date Account Titles and Explanation Debit Credit Jan. 3 8% Notes Receivable 21600       Cash 21600 Feb. 10 Accounts Receivable 18600       Sales 18600 Cost of goods sold 11160       Merchandise inventory 11160 Feb. 13 Accounts Receivable 61200       Sales 61200 Cost of goods sold 55080       Merchandise inventory 55080 Mar. 12 6% Notes receivable 18600       Accounts receivable 18600 Mar. 14 9% Notes receivable 61200       Accounts receivable 61200 Apr. 3 Cash (21,600 x 8% x 90/360) 432 8% Note receivable 21600       Interest Revenue 432       9% Note receivable 21600 May. 11 Cash (186 + 18600) 18786       Interest Revenue (18,600 x 6% x 60/360) 186       6% Note Receivable 18600 May. 13 Account receivable (918 + 61,200) 62118       Interest revenue (61,200 x 9% x 60/360) 918       9% Note receivable 61200 Jul. 12 Cash (1242 + 62,118) 63360       Interest revenue (62,118 x 12% x 60/360) 1242       Accounts receivable 62118 Aug. 1 Cash (648 + 21,600) 22248       Interest revenue (21,600 x 9% x 120/360) 648       Note receivable 21600 Oct. 5 Accounts Receivable 13900       Sales 13900 Cost of goods sold 8340       Merchandise inventory 8340 Oct. 15 Cash 13900       Accounts receivable 13900

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