Question

Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2018:

Mar.		17		Accounts receivable of $3,100 were written off as uncollectible. The company uses the allowance method.
		30		Loaned an officer of the company $39,000 and received a note requiring principal and interest at 8% to be paid on March 30, 2019.
May		30		Discounted the $39,000 note at a local bank. The bank’s discount rate is 9%. The note was discounted without recourse and the sale criteria are met.
June		30		Sold merchandise to the Blankenship Company for $26,000. Terms of the sale are 3/10, n/30. Weldon uses the gross method to account for cash discounts.
July		8		The Blankenship Company paid its account in full.
Aug.		31		Sold stock in a nonpublic company with a book value of $6,400 and accepted a $7,400 noninterest-bearing note with a discount rate of 9%. The $7,400 payment is due on February 28, 2019. The stock has no ready market value.
Dec.		31		Bad debt expense is estimated to be 2% of credit sales for the year. Credit sales for 2018 were $840,000.

Required:

1 & 2. Prepare journal entries for each of the above transactions and additional year-end adjusting entries indicated. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet Accounts receivable of $3,100 were written off as uncollectible. The company uses the allowance method. Note: Enter debits before credits. Date General Journal Debit Credit March 17, 2018

Answer 1

Weldon Corporation Journal En Date 17.3.2018 Allowance for uncollectible accounts a/c Dr Particulars Debit in $ Credit in $ 3100 To Accounts receivable 3100 Uncollectibles written o 30.3.2018 Note receivable a/c Dr 39000 To Cash 39000 Loaned an officer of the compan 30.5.2018Interest receivable a/c Dr. 520 To Interest revenue 520 Interest receivable recorded Interest revenue: ($39,000 x 896 x2/12)-$520 30.5.2018 Cash a/c Dr. 38961 Loss on sale of note receivable a/c Dr To Interest receivable To Note receivable 559 520 39000 Discounted the $39,000 note at a local bank Face amount Interest to maturity ( 39000 x 8%) Maturity value Discount 42120 x 9% x 10/12 Cash proceeds 39000 3120 3159 38961 Date Particulars Debit in $ Credit in $ 30.6.2018 Accounts receivable a/c 26000 To Sales revenue 26000 Sales on account 8.7.2018 Cash ac Dr. Dr. 25220 Sales discounts a/ 780 To Accounts receivable 26000 Debtor paid in full in discount period 26000 x 3% 780 31.8.2018 Note receivable a/c Dr 7400 To Discount on note receivable To Investments To Gain on sale of investments 6400 667 (Sold stock in a non public Discount on note receivable: (S7,400 x 996 x 6/12-S588 31.12.2018 Bad debt expense a/c Dr. 16800 To Allowance for uncollectible accounts 16800 Bad debts estimated) 840000 2%-16800 Adiusting Enteries Date 31.12.2018 Discount on note receivable a/c Particulars Debit in S Credit in $ Dr To Interest revenue (Record accrued interest Interest revenue: ($7,400 x9%x 4/12) 222