The following were selected from among the transactions completed by Caldemeyer
ID: 2582523 • Letter: T
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. 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
The following entries shall passed for these transaction
3 Jan. Bills/Notes receivable a/c........Dr $21600
To cash a/c $21600
(being loaned to Trina Gelhaus against 90 days, 8% note)
10 Feb. Bradford & co. a/c.......... Dr $25200
To Sales Account $25200
(Being sales made to bradford & co.)
COGS...........Dr $15120
To Inventory account $15120
(Being merchandise costing $15120 sold to bradford & co.)
13. Dry Creek Company a/c ..........Dr $ $55200
To Sales account $55200
(Being sale made to Dry Creek Company)
COGS a/c ..........Dr $49680
To inventory a/c $49680
(being merchandise costing $49680 sold to Dry Creek Company)
March 12 Bills/notes receivable a/c.....Dr $25200
To Bradford & Co. $25200
(Being 60days, 8% note issued to bradford and co.)
14 Bills/Notes receivable a/c ........Dr $55200
To Dry Creek co. $55200
(Being 60 days, 9% notes issued to dry creek co.)
April 13 Cash a/c ....... Dr $426.08
To Interest receivable a/c $426.08
(Being interest received on amount $21600 i.e 21600x8%x90/365)
Trina Gelhouse a/c ...... Dr $21600
To Bills/Notes receivable a/c $21600
( Being entry passed for renewal )
Bills receivable a/c ........Dr $21600
To Trina Gelhouse $21600
(Being new 9%, 120 days note issued)
May 11. Cash A/c ......Dr $25531.4
To Bills/notes receivable a/c $25200
To interest receivable a/c $331.40
( Being amount received including interest i.e 25200x8%x60/365)
May 13. Bills/Notes Receivable a/c .......Dr $816.66
To Interest income receivable a/c $816.66
(Being interest due on Dry creek co. notes )
Dry Creek co. ......Dr $56016.66
To Bills/notes receivable a/c $56016.66
(Being note receivable dishonoured and this amount include interest due thereon)
12 July Dry Creek co. a/c .....Dr $1104.99
To interest receivable a/c $1104.99
(Being interest charged i.e 56016.66x12%x60/365)
Cash a/c ......Dr $57121.65
To Dry Creek co. $57121.65
(Being amount received from Dry Creek co.)
Aug 1 Cash a/c ......Dr $22239.12
To Bills/Notes receivable a/c $21600
To interest receivable a/c $ 639.12
(Being cash received fron Trina)
Oct5. Halloran Co. a/c ....Dr $14500
To Sales a/c $14500
(Being sale made to Halloran co.)
COGS a/c ......Dr $8700
To Inventory account $8700
15. Cash a/c ....Dr $14500
To Halloran co. $14500
(Being cash received)
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