Question

Journal Entries for Accounts and Notes Receivable Lancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $20,000, 60 day, six percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received an $18,000, 120 day, seven percent note from B. Shore Company on account. Dec. 16 Received a $14,400, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc. uses the allowance method of providing for credit losses. 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 Dec.31 Doubtful Accounts of $24,500. An analysis of aged receivables indicates that the desired balance of the allowance account should be $21,300. Dec.31 Made the appropriate adjusting entries for interest. Required Record the foregoing transactions and adjustments in general journal form. (Round all interest income calculations to the nearest dollar.) General Journal Description Debit Credit Date Jun.8 Received a 60-day, 6 percent note on account. Aug. 7

Answer 1

Page 1 coledit $20,000 Journal Entojies Date Accounts Title and Explanationg_Debit June 8 Notes Receivable-B, Elliot $20,000 Accounds Receivable-B, Elliot to second syeceived a 60-day, 6 pescent note on account.) | Aug cash $20,200 Intestest Income $20,000x6". 60360) Notes geceivable -R, Elliot (To gecord sjeceipt of poincipal plus intesjest from R- Elliot) $200 &20,000 Septı $18,000 $ 18,000 Notes Syeceivable - B shoe company Accounts seceivable - 8 shoe Company (To gecogd gjeceived a 190-day 4 peocent note on account) Dec 16 Notes gjeceivable-c Judd $14,400 $14,400 Accounts gjeceivable - R. Elliot (To sjecosid Received a 45-day, 10 pesscent note on account)

page 2 Dec 30 Accounts speceivable B shoop $18.420 company ३५२० $18,000 Intesjest Income ($18,000 X 9.41201360) Note syeceivable -B shogle Company (To second dishonosting of Boshosle company's note) Dec 31 $18,420 $18,420 Allowance fosy doubtful Accounts Accounts sjeceivable - Bo shosle company (To wsite off Boshogle's account) Dec 31 Bad debts Eupen be ($24,500 $45,800 +21,300) Allowance fo.y doubtful Acnta (To second allowance fos uncollectible Accounts) $45,800 Dec 31 $ 60 Intestest Receivable ($14,400 * 10%. x15360) Intesjest Income (To accoue integyest Income on decembesy 16 note $60