Journal Entries for Accounts and Notes Receivable Pittsburgh, Inc., began busine

Question

Journal Entries for Accounts and Notes Receivable
Pittsburgh, Inc., began business on January 1. Certain transactions for the year follow:

Required
Record the foregoing transactions and adjustments in general journal form. (Use 360 days for all interest calculations. Round all Interest Income calculations to the nearest dollar.)

Jun.8 Received a $31,000, 60 day, eight percent note on account from J. Albert. Aug.7 Received payment from J. Albert on her note (principal plus interest). Sep.1 Received an $37,000, 120 day, nine percent note from R.T. Matthews Company on account. Dec.16 Received a $29,000, 45 day, ten percent note from D. Leroy on account. Dec.30 R.T. Matthews Company failed to pay its note. Dec.31 Wrote off R.T. Matthews account as uncollectible. Pittsburgh, Inc. uses the allowance method of providing for credit losses. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Accounts of $46,200. An analysis of aged receivables indicates that the desired balance of the allowance account should be $40,000. Dec.31 Made the appropriate adjusting entries for interest.

Explanation / Answer

Date Particulars Amount($) Amount($) June 8 Notes Receivable A/c 31000 To Accounts Receivable - J Alberts 31000 Received $31000, 60 days 8% notes on account August 7 Cash A/c 31413.33 To Notes Receivable 31000 To Interest Revenue 413.33 Collection of notes from J Albert Sep 1 Notes Receivable 37000 To Accounts Receivable -R T Mathews company 37000 Received $37000, 120 days 9% note Dec 16 Notes Receivable A/c 29000 To Accounts Receivable 29000 Received $29000, 45 days 10 % notes Dec 31 Allowance for Bad debt 37000 To Notes Receivable 37000 Uncollectible Note-R T Mathews Company Dec 31 Cash A/c 29357.53 To Notes Recievable A/c 29000 To Interest revenue A/c(collection of Notes frm leroy 357.53 De 31 Bad debts Expense 6000 To Allownce for Doubtful debts 6000 Record of credit loss)

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