Question

1. Prepare journal entries to record the following transactions entered into by Bluenote Corporation (19 marks):

2017

Jun    1       Received a $9,000, 4%, 1-year note from Kim Sharp as full payment on her account. Interest is due at maturity.

Nov   1       Sold merchandise on account to Henrik Inc. for $7,000, terms 2/10, n/30. The cost of the merchandise was $5,950 and Bluenote uses a perpetual inventory system.

          5       Henrik Inc. returned unopened merchandise that they had paid $2,000 for, which had cost Bluenote $1,700. The inventory was returned to the store shelves.

          9       Received payment in full from Henrik Inc.

Dec 31       Accrued interest on Sharp’s note.

2018

Jun    1       Kim Sharp honoured her promissory note by sending the principal amount plus interest. No interest has been accrued in 2018.

Answer 1

Date	General Journal	Debit	Credit
Jun-01	Notes Receviable	9,000.00
	Accounts Receivable-Kim Sharp		9,000.00
Nov-01	Accounts Receivable- Henrik Inc	7,000.00
	Sales		7,000.00
Nov-01	Cost of Goods Sold	5,950.00
	Inventory		5,950.00
Nov-05	Sales Returns and allowance	2,000.00
	Accounts Receivable- Henrik Inc		2,000.00
Nov-05	Inventory	1,700.00
	Cost of Goods Sold		1,700.00
Nov-09	Cash	4,900.00
	Sales Discount	100.00
	Accounts Receivable- Henrik Inc		5,000.00
Dec-31	Interest Receivable	210.00
	Interest Revenue		210.00
Jun-01	Cash	9,360.00
	Notes Receivable		9,000.00
	Interest Receivable		210.00
	Interest Revenue		150.00