Assume that Penske Tire, a large tire distributor, completed the following selected transactions:
2016
Dec. 1 Sold tires to Select Movers Inc., receiving a $40,000, six-month, 5 percent note. Ignore cost of goods sold.
31 Made an adjusting entry to accrue interest on the Select Movers note.
31 Made an adjusting entry to record bad debt expense based on an aging of accounts receivable. The aging analysis indicates that $56,200 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Doubtful Accounts is $47,500.
2017
Jun. 1 Collected the maturity value of the Select Movers note.
30 Sold tires for $16,000 on MasterCard. MasterCard charges 1.75 percent.
Jul. 21 Sold merchandise to Marco Donolo, receiving a 45-day, 3 percent note for $11,200. Ignore cost of goods sold.
Sep. 4 Donolo dishonored (failed to pay) his note at maturity; converted the maturity value of the note to an account receivable.
Nov. 11 Sold merchandise to Solomon Tractor for $9,600, receiving a 120-day,
5 percent note. Ignore cost of goods sold.
Dec. 2 Collected in full from Donolo.
31 Accrued the interest on the Solomon Tractor note.
Required
Record the transactions in the general journal. Explanations are not required.
Round interest amounts to the nearest cent.