Question

3) Hughes Foods completed the following selected transactions 2016 Oct 31 Sold goods to BiLo's Foods, receiving a $36,000, three-month, 4.5% note. (You do not need to make the cost of goods sold journal entry for this transaction.) Made an adjusting entry to accrue interest on the BiLo's Foods note. Dec 31 2017 Jan 31 Feb 18 19 Collected the BiLo's Foods note. Received a 90-day, 7.00%, $7,000 note from Dutton Market on account. Sold the Dutton Market note to Seabrook Bank, receiving cash of $6,800. (Debit the difference to financing expense.) Loaned $15,600 cash to Sauble Co., receiving a 90-day, 9.50% note. Accrued the interest on the Sauble Co. note. 1- make a dournal fois Nov 11 Dec 31 Journal frisk for dournals Required: 2- Addast and entery 1. Record the transactions in Hughes Foods' journal. Assume that no sales returns are expected. Round all amounts to the nearest dollar. Explanations are not required. Show what Hughes Foods will report on its comparative classified balance sheet at December 31, 2017, and December 31, 2016. 11. -

Answer 1

Date	Journal entries		Debit amount	Credit amount
31/10/2016	Bilo foods A/c Dr		$36,000
	To credit sales			$36,000
	(Being Goods sold on credit basis 4.5%/3 months note
31/12/2016	Bilo foods A/c Dr		$270
	To Accrued interest A/c			$270
	(Being interest accrued for 2 months = $36,000 * 4.5/100 * 2/12)
31/01/2017	Cash/bank A/c Dr		$36,405
	To Bilo foods			$36,270
	To accrued interest			$135
	(Being interest accrued for 1 month i.e 36,000* 4.5/100 *1/12, and cash received with 3 month interest)
18/2/2017	Note A/c Dr		$7,000
	To Dutton Market A/c			$7,000
	(Being note received from Dutton Market)
19/2/2017	Cash A/c Dr		$6,800
	Finance charges A/c Dr		$200
	To Note A/c			$7000
	(Being note sold to seebrook bank and cash received)
11/11/2017	Note A/c Dr		$15,600
	To Cash A/c			$15,600
	(Being cash given in exchange of note @ 9% for 90 days)
31/12/2017	Note A/c Dr		$207
	To Accrued Interest A/c			$207
	(Being interest accrued for 15,600 * 9/100 * 51/365 {11 november to 31 december})