Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Assume this is a year in which February has 28 days.
Jan. 3 Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10 Sold merchandise on account to Bradford & Co., $24,000. The cost of the goods sold was $14,400. 13 Sold merchandise on account to Dry Creek Co., $60,000. The cost of goods sold was $54,000. Mar. 12 Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account. 14 Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account. Apr. 3 Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11 Received from Bradford & Co. the amount due on the note of March 12. 13 Dry Creek Co. dishonored its note dated March 14. July 12 Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1 Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5 Sold merchandise on account, terms 2/10, n/30, to Halloran Co., $13,500. Record the sale net of the 2% discount. The cost of goods sold was $8,100. 15 Received from Halloran Co. the amount of the invoice of October 5, less 2% discount.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Assume this is a year in which February has 28 days.
| Jan. 3 | Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. |
| Feb. 10 | Sold merchandise on account to Bradford & Co., $24,000. The cost of the goods sold was $14,400. |
| 13 | Sold merchandise on account to Dry Creek Co., $60,000. The cost of goods sold was $54,000. |
| Mar. 12 | Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account. |
| 14 | Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account. |
| Apr. 3 | Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) |
| May 11 | Received from Bradford & Co. the amount due on the note of March 12. |
| 13 | Dry Creek Co. dishonored its note dated March 14. |
| July 12 | Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. |
| Aug. 1 | Received from Trina Gelhaus the amount due on her note of April 3. |
| Oct. 5 | Sold merchandise on account, terms 2/10, n/30, to Halloran Co., $13,500. Record the sale net of the 2% discount. The cost of goods sold was $8,100. |
| 15 | Received from Halloran Co. the amount of the invoice of October 5, less 2% discount. |
Related questions
Problem 9-5A Analyzing and journalizing notes receivable transactions LO C2, C3, P4
The following selected transactions are from Ohlm Company. (Use 360 days a year.)
2016
| Dec. | 16 | Accepted a $10,200, 60-day, 7% note dated this day in granting Danny Todd a time extension on his past-due account receivable. | ||
| 31 | Made an adjusting entry to record the accrued interest on the Todd note. |
2017
| Feb. | 14 | Received Toddâs payment of principal and interest on the note dated December 16. | ||
| Mar. | 2 | Accepted a(n) $7,700, 7%, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co. | ||
| 17 | Accepted a(n) $2,100, 30-day, 7% note dated this day in granting Ava Privet a time extension on her past-due account receivable. | |||
| Apr. | 16 | Privet dishonored her note when presented for payment. | ||
| May | 31 | Midnight Co. refused to pay the note that was due to Ohlm Co. on May 31. Prepare the journal entry to charge the dishonored note plus accrued interest to Midnight Co.'s accounts receivable. | ||
| July | 16 | Received payment from Midnight Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at 7%. | ||
| Aug. | 7 | Accepted a(n) $7,700, 90-day, 12% note dated this day in granting a time extension on the past-due account receivable of Mulan Co. | ||
| Sep. | 3 | Accepted a(n) $2,350, 60-day, 9% note dated this day in granting Noah Carson a time extension on his past-due account receivable. | ||
| Nov. | 2 | Received payment of principal plus interest from Carson for the September 3 note. | ||
| Nov. | 5 | Received payment of principal plus interest from Mulan for the August 7 note. | ||
| Dec. | 1 | Wrote off the Privet account against the Allowance for Doubtful Accounts. |
Required:
1-a. First, complete the table below to calculate the interest amount at December 31, 2016.
1-b. Use the calculated value to prepare your journal entries for 2016 transactions.
1-c. First, complete the table below to calculate the interest amounts.
1-d. Use those calculated values to prepare your journal entries for 2017 transactions.
Required 1A
First, complete the table below to calculate the interest amount at December 31, 2016.
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Required 1B
Use the calculated value to prepare your journal entries for 2016 transactions.
Journal entry worksheet
Accepted a $10,200, 60-day, 7% note dated this day in granting Danny Todd a time extension on his past-due account receivable.
Note: Enter debits before credits.
Made an adjusting entry to record the accrued interest on the Todd note.
Required 1C
First, complete the table below to calculate the interest amounts.
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Required 1D
Use those calculated values to prepare your journal entries for 2017 transactions.
Journal entry worksheet
.....
1. Received Toddâs payment of principal and interest on the note dated December 16.
2. Accepted a $7,700, 7%, 90-day note dated this day in granting a time extension on the past-due account receivable from Midnight Co.
3. Accepted a $2,100, 30-day, 7% note dated this day in granting Ava Privet a time extension on her past-due account receivable.
4. Privet dishonored her note when presented for payment.
5. Midnight Co. refused to pay the note that was due to Ohlm Co. on May 31. Prepare the journal entry to charge the dishonored note plus accrued interest to Midnight Co.âs accounts receivable.
6. Received payment from Midnight Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at 7%.
7. Accepted a $7,700, 90-day, 12% note dated this day in granting a time extension on the past-due account receivable of Mulan Co.
8. Accepted a $2,350, 60-day, 9% note dated this day in granting Noah Carson a time extension on his past-due account receivable.
9. Received payment of principal plus interest from Carson for the September 3 note.
10. Received payment of principal plus interest from Mulan for the August 7 note.
11. Wrote off the Privet account against Allowance for Doubtful Accounts.
