Mar. 1 Mar. 18 Apr. 30 May 17 July 29 Aug. 23 Mar. 1. Received a $50,400, 60-day
ID: 2481845 • Letter: M
Question
Mar. 1
Mar. 18
Apr. 30
May 17
July 29
Aug. 23
Mar. 1. Received a $50,400, 60-day, 6% note dated March 1 from Tomekia Co. on account. 18. Received a $10,800, 60-day, 9% note dated March 18 from Mystic Co. on account. Apr. 30. The note dated March 1 from Tomekia Co. is dishonored, and the customer's account is charged for the note, including interest. May 17. The note dated March 18 from Mystic Co. is dishonored, and the customer's account is charged for the note, including interest. July 29. Cash is received for the amount due on the dishonored note dated March 1 plus interest for 90 days at 6% on the total amount debited to Tomekia Co. on April 30. Aug. 23. Wrote off against the allowance account the amount charged to Mystic Co. on May 17 for the dishonored note dated March 18.
Explanation / Answer
Answer:
1 Mar.
Dr Notes Receivable 50,400
Cr Accounts Receivable 50,400
18 Mar.
Dr Notes Receivable 10,800
Cr Accounts Receivable 10,800
30 Apr.
50,400 x 6% x 60/360 = $504 accrued interest revenue
Dr Accounts Receivable 50,904
Cr Notes Receivable 50400
Cr Interest Revenue 504
17 May
10,800 x 9% x 60/360 = $162 accrued interest revenue
Dr Accounts Receivable10,962
Cr Notes Receivable 10,800
Cr Interest Revenue 162
29 July
50,904 x 6% x 90/360 = $763.56 accrued interest revenue
Dr Cash 51667.56
Cr Accounts Receivable 50,904
Cr Interest Revenue 763.56
23 Aug
Dr Allowance for Doubtful Accounts $10962
Cr Accounts Receivable 10962