Question

REQUIRED Record the transactions in a general journal. 2/3) len: S3.49 NOTES RECEIVABLE DISCOUNTING Marienau Suppliers had the following transactions: Mar. 1 Sold merchandise on account to G. Perez $5,000. G. Perez's note is discounted at Commerce Bank at a discount rate of 8%. merchandise. 20 G. Perez gave a $5,000, 90-day, 6% note to extend time for payment. Apr. 20 Received a $3,000, 60-day, 6% note from D. Larson in payment for sale of May 5 D. Larson's note is discounted at Commerce Bank at a discount rate of 7%. June 19 D. Larson's note is dishonored. The bank bills Marienau for the maturity July 31 D. Larson's dishonored note is collected; Larson pays Marienau the matu- 30 value of the note plus a $40 bank fee. rity value of the note, the $40 bank fee, and interest at 6% on the maturity value plus the bank fee. Sold merchandise on account to A. Bauer $$,600. A. Bauer paid $400 and gave a $5,200, 30-day, 5% note to extend time for payment. A. Bauer paid $400, plus interest, and gave a new $4,800, 60-day, 6% note to extend time for payment A. Bauer's note is discounted at Commerce Bank at a discount rate of Aug. 1 12 Sept. 11 26 Nov. 10 A. Bauer's note is dishonored. The bank bills Marienau for the maturity value of the note plus a S40 bank fee. value of the note, the $40 bank fee, and interest at 6% on the maturity value plus the bank fee. Dec. 15 A. Bauer's dishonored note is collected. Bauer pays Marienau the maturity REQUIRED Record the transactions in a general journal.

Answer 1

Step 1

Date wise General Journal entry in the books of Marienau will be as under:

Date	Account title and Description	Ref.	Debit	Credit
March 1	Accounts Receivable -G. Parez To Sales ( Merchandise sold on account)		$ 5,000	$5,000
March 20	Notes Receivable- G. Parez Accounts Receivable -G. Parez ( Note received from G Parez)		$5,000	$5,000
March 30	cash Interest expense    Notes receivable -G. Parez ( Notes discounted with Bank at discounted rate of 8%. Since note is due after 60 days after March 20, its maturity value worked out to be $ 5049.31. Discount by bank worked out to be $ 55.33. As such Bank will pay $ 5049.31- $ 55.33= $ 4,993.98. Remaining amount will be recorded as Interest expense)		$4,993.98 $6.02	$5,000
April 20	Note Receivables-D. Larson Sale to D. Larson ( Receipt of 60 days, 6% Note )		$3,000	$3,000
May 5	Cash Interest Revenue    Note Receivable- D. Larson (( Notes discounted with Bank at discounted rate of 7%. Since note is due after 60 days after April 20, its maturity value worked out to be $ 3029.59. Discount by bank worked out to be $ 26.14. As such Bank will pay $ 3029.59- $ 26.14= $ 3,003.14. Thus amount of $ 3.45 will be recorded as Interest revenue)		$3003.14	$ 3.14 $3,000
June 19	Accounts Receivable- D.Larson    Note Receivable-D.Larson Interest Revenue ( Dishonour of Note, Bank charge a fee of $ 40)		$3069.59	$3,000 $ 69.59
July 31	Note Receivable - D. Larson Accounts Receivable- D. Larson (Note received from D. Larson, for dishonored Note, including fee charged by bank)		$3069.59	$3069.59
August 1	Accounts receivable - A. Bauer    Sales ( On account sale to A. Bauer)		$5,600	$5,600
August 12	Cash Note Receivable 1-A. Bauer Accounts Receivable-A. Bauer (Cash and Note received from A. Bauer)		$400 $5,200	$5,600
September 11	Cash Note Receivable 2-A. Bauer    Note Receivable 1-A. Bauer    ( New Note Received from A. Bauer)		$400 $5000	$5,200
September 26