Question

Problem 3-6A On January 1, 2012, w horse Co had Accounts Receivable of $56,700 and Allowance for Doubtful Accounts of $3,800 Wiadhorse co prepares financial statements annually. During the year, the following selected transactions occurred: Jan 5 Sold $3,200 of merchandise to Rian Company, terms 30. Feb. 2 Accepted a $3,200, 4-month, 9 promissory note from Rian Company for balance due. Sold $13,200 of merchandise to Cato Company and accepted Cato's $13,200, 2-month, 11% note for 12 the balance due 26 Sold $12,100 of merchandise to Malcolm Co., terms 10. Apr 5 Accepted a $12, 100, 3-month, 8% note from Malcolm Co. for balance due. 12 Collected Cato Company note in full. June 2 Collected Rian Company note in full. Sold 2.100 of merchandise to GerriInc. and accepted a $2,100, 6-month, 12% note for the amount 15 due. Journalize the transactions. (Omit cost of goods sold entries.) (Credit account titles are automatically Indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Account Tities and Explanation Date Credit Debit

Answer 1

Solution of the above problem is as under:

Statement showing Journal Entries recorded in the Books of Wildhorse Co. during the year
Date	Account Titles and Explanation	Debit ($)	Credit ($)
Jan-05	Accounts Receivables-Rian Co. A/c Dr.	3200
	To Sales		3200
	(Being merchandise sold to Rian Company on credit)
Feb-02	9% Promissory Note A/c Dr	3200
	To Accounts Receivables-Rian Co A/c		3200
	(Being 9% 4 months promissory note accepted for the balance due)
Feb-12	Accounts Receivables-Cato Co. A/c Dr.	13200
	To Sales		13200
	(Being merchandise sold to Cato Company on credit)
Feb-12	11% Promissory Note A/c Dr.	13200
	To Accounts Receivables-Cato Co. A/c Dr.		13200
	(Being 11% 2 months promissory note accepted for the balance due)
Feb-26	Accounts Receivables-Malcolm Co. A/c Dr.	12100
	To Sales		12100
	(Being merchandise sold to Malcolm Company on credit)
Apr-05	8% Promissory Note A/c Dr.	12100
	To Accounts Receivables-Malcolm Co. A/c Dr.		12100
	(Being 8% 3 months promissory note accepted for the balance due)
Apr-12	Cash A/c Dr.	13442
	To 11% Promissory Note A/c		13200
	To Interest Revenue A/c (13200*11% for 2 months)		242
	(Being promissory note honored on due date and recorded)
Jun-02	Cash A/c Dr.	3296
	To 9% Promissory Note A/c		3200
	To Interest Revenue A/c (3200*9% for 4 months)		96
	(Being promissory note honored on due date and recorded)
Jun-15	Accounts Receivables-Gerri Inc. A/c Dr.	2100
	To Sales		2100
	(Being merchandise sold to Gerri Inc. on credit)
Jun-15	12% Promissory Note A/c Dr.	2100
	To Accounts Receivables-Gerri Inc. A/c Dr.		2100
	(Being 12% 6 months promissory note accepted for the balance due)