Prepare journal entries to record the following transactions entered into by Fli
ID: 2503183 • Letter: P
Question
Prepare journal entries to record the following transactions entered into by Flip Company:
2012
June 1 Accepted a $10,000, 12%, 1-year note from Flop as full payment on her account.
Nov. 1 Sold merchandise on account to Flap, Inc. for $12,000, terms 2/10, n/30.
Nov. 5 Flap, Inc. returned merchandise worth $500.
Nov. 9 Received payment in full from Flap, Inc.
Dec. 31 Accrued interest on Flop's note.
2013
June 1 Flop honored her promissory note by sending the face amount plus interest. No interest has been accrued in 2013
Explanation / Answer
Journal entries are
June 1
Notes receivable ... dr = $10000
Cash (any other account due) .... credit = $10000
Nov 1.
Accounts Receivable ... dr =$12000
Sales ... Cr = $12000
Nov 5.
Account Recievable ... cr =$500
Sales... dr = $500
Nov 9
Cash... Dr = $11500
Account Recievable ... cr =$11500
dec 31
accrued interest ... dr = $600
Interest ... Cr = $600
2013 june 1
Cash .. dr = $11200
accrued interest ... cr = $600
Interest ... Cr = $600
Notes ... cr = $10000