Accounting for uncollectible accounts (aging of accounts method), card sales, notes receivable, and accrued interest revenue [20-30 min]
Sleepy Recliner Chairs completed the following selected transactions:
2011 | |
Jul1 | Sold inventory to Go - Mart, receiving a $37,000, nine-month, 8% note. Ignore cost of goods sold. |
Oct 31 | Recorded credit- and debit-card sales for the period of $19,000. |
Nov 3 | Card processor drafted company’s checking account for processing fee of $420. |
Dec 31 | Made an adjusting entry to accrue interest on the Go - Mart note. |
31 | Made an adjusting entry to record uncollectible account expense based on an aging of accounts receivable. The aging schedule shows that $14,100 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for uncollectible accounts is $10,200. |
2012 | |
Apr1 | Collected the maturity value of the Go - Mart note. |
Jun23 | Sold merchandise to Appeal, Corp., receiving a 60-day, 12% note for $7,000. Ignore cost of goods sold. |
Aug22 | Appeal, Corp., dishonored its note (failed to pay) at maturity; we converted the maturity value of the note to an account receivable. |
Nov16 | Loaned $23,000 cash to Creed, Inc., receiving a 90-day, 16% note. |
Dec5 | Collected in full on account from Appeal, Corp. |
31 | Accrued the interest on the Creed, Inc., note. |
Requirement
1. Record the transactions in the journal of Sleepy Recliner Chairs. Explanations are not required. (For notes stated in days, use a 360-day year. Round to the nearest dollar.)
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