Question
Prepare journal entries to record the following transactions entered into by Elway Company:
2008
June 1 Received a $20,000, 12%, 1-year note from Sue Gold as full payment on her account.
Nov. 1 Sold merchandise on account to Peyson, Inc. for $10,000, terms 2/10, n/30.
Nov. 5 Peyson, Inc. returned merchandise worth $500.
Nov. 9 Received payment in full from Peyson, Inc.
Dec. 31 Accrued interest on Gold's note.
2009
June 1 Sue Gold honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2009.
Explanation / Answer
Please go through the journal entries below.. 2008 Particulars Debit credit 1-Jun Accounts Receivebles 20000 sue gold 20000 1-Nov Accounts receivble - peyson inc 10000 sale 10000 5-Nov sales returns 500 Accounts receivble - peyson inc 500 9-Nov cash 9310 Disount allowd 190 Accounts receivble - peyson inc 9500 31-Dec Interest 1200 Accrued intest 1200 2009 1-Jun cash 22400 Accounts Receivebles 20000 Accrued interest' 1200 Interest 1200 2008 Particulars Debit credit 1-Jun Accounts Receivebles 20000 sue gold 20000 1-Nov Accounts receivble - peyson inc 10000 sale 10000 5-Nov sales returns 500 Accounts receivble - peyson inc 500 9-Nov cash 9310 Disount allowd 190 Accounts receivble - peyson inc 9500 31-Dec Interest 1200 Accrued intest 1200 2009 1-Jun cash 22400 Accounts Receivebles 20000 Accrued interest' 1200 Interest 1200