Prepare general journal entries for the following transactions of Norman Company

Question

Prepare general journal entries for the following transactions of Norman Company, assuming they se the allowance method to account for uncollectible accounts. Sold S3.500 of merchandise to Lance Co., receiving an 8%, 90-day, $3,500 note. 15 Wrote off $1,500 owed by Guy Co. from a previous period sale. 30 Received a $5,000, 696, 30-day note receivable from James Co. as settlement for its $5,000 account receivable. Apr 01 May 30 The note received from James on April 30 was collected in full. Jun 30 Lance Co. was unable to pay the note on the due date Jul 15 Guy Co. paid $1,000 of the amount written off on April 15

Explanation / Answer

Journal entries Date Account titles Debit Credit 01-Apr 8% Notes Receivable $        3,500 Sales $        3,500 (To record sales on notes) 15-Apr Allowance for Doubtful Accounts $        1,500 Accounts Receivable $        1,500 (To write off Guy Co. account) 30-Apr 6% Notes Receivable $        5,000 Accounts Receivable - James Co. $        5,000 (Converted accounts receivable to notes) 30-Apr Interest Receivable $        23.33 Interest - Income $        23.33 ($3,500 * 8% * (1 / 12) (To record interest income from 8% notes) 30-May Interest Receivable $        23.33 Interest - Income $        23.33 ($3,500 * 8% * (1 / 12) (To record interest income from 8% notes) 30-May Interest Receivable $              25 Interest - Income $              25 ($5,000 * 6% * (1 / 12) (To record interest income from 6% notes) 30-May Cash $        5,025 6% Notes Receivable 5000 Interest Receivable $              25 (To record cash received from James Co.) 30-Jun Interest Receivable $        23.33 Interest - Income $        23.33 ($3,500 * 8% * (1 / 12) (To record interest income from 8% notes) 30-Jun Accounts Receivable = Lance Co. $        3,570 Interest Receivable $        3,500 8% Notes Receivable $              70 (To record the fail of payment on due) 15-Jul Accounts Receivable $        1,000 Allowance for Doubtful Accounts $        1,000 (To reverse the written off entry) Cash $        1,000 Accounts Receivable $        1,000 (Cash received from Guy Co. previously written off)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---