Prepare journal entries to record Sherman\'s 2014 and 2015 summarized transactio

Question

Prepare journal entries to record Sherman's 2014 and 2015 summarized transactions and its year-end adjusting entry to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable. Round amounts to the nearest dollar) The following selected transactions are from Springer Company 2014 notes receivable transactions C2 C3 P3 Accepted a S4.800, 90 day, 8% note dated this day in granting Steve Julian a time extension on his past-due account receivable. Made an adjusting entry to record the accrued interest on the Julian note. No. 1 Dec. 31 2015 Received Julian's payment for principal and interest on the note dated November l Accepted a $12.600. 30-day, 8% note dated this day in granting a time extension on the past- due account receivable from King Co Accepted a S6200, 60-day, 12% note dated this day in granting Myron Shelley a time exten- sion on his past-duc account reccivable The King Co. dishonored its note when presented for payment Jan. Feb. Check Jar 30 Cr ?nterest 30 28 1 30 Mar. Apr. 30 Received payment of principal plus interest from M. Shelley for the March I note. June 15 Accepted a $2,000, 72-day, 8% note dated this day in granting a time extension on the past-due April 30, Cr $124 account receivable of Ryder Solon 21 Accepted a $9,500. 90-day. 8% note dated this day in granting J. Felton a time extension on his Aug. 26 Sep. 19 Nov. 30 past-due account receivable. Received payment of principal plus interest from R. Solon for the note of June 15 Received payment of principal plus interest from J. Felton for the June 21 note Wrote off King's account against Allowance for Doubtful Accounts. ue $190 1. Prepare journal entries to record these transactions and events. (Round amounts to the nearest dollar.) Analysis Component 2. What reporting is necessary when a business pledges receivables as security for a loan and the loan is still outstanding at the end of the period? Explain the reason for this requirement and the accounting principle being satisfied

Explanation / Answer

In footnotes, to your balance sheet, the disclosure relating to the name of the lender, the terms of the loan, the loan amount, the amount of pledged receivables and any other material information about the loan agreement has to be disclosed

Journal Entries Date Account description Debit Credit 1-Nov Note Receivable      4,800.00 Account receivable      4,800.00 31-Dec Accrued Interest            64.00 Interest revenue            64.00 (4800*60/360) 30-Jan Bank      4,896.00 Note Receivable      4,800.00 Accrued Interest            64.00 Interest revenue            32.00 (4800*30/360) 28-Feb Note Receivable    12,600.00 Account receivable    12,600.00 1-Mar Note Receivable      6,200.00 Account receivable      6,200.00 30-Mar Accrued Interest            84.00 Interest revenue            84.00 30-Mar Note Dishonured    12,600.00 Note Receivable    12,600.00 30-Apr Bank      6,324.00 Note Receivable      6,200.00 Interest revenue          124.00 15-Jun Note Receivable      2,000.00 Account receivable    72,000.00 21-Jun Note Receivable      9,500.00 Account receivable    90,000.00 26-Aug Bank      9,500.00 Note Receivable      9,500.00 Interest revenue          190.00 Allowances for Doubtful Debts    12,684.00 Accrued Interest            84.00 Note Dishonoured    12,600.00

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---