Question

Relaxing Recliner Chairs completed the following selected transactions:
2013
Jul. 1 Sold merchandise inventory to Great Mart, receiving a $ 45,000, nine-month, 12% note. Ignore cost of goods sold.
Oct. 31 Recorded credit and debit card sales for the period of $ 21,000. (Use the gross method.)
Nov. 3 Card processor drafted company’s checking account for processing fee of $ 410.
Dec. 31 Made an adjusting entry to accrue interest on the Great Mart note.
31 Made an adjusting entry to record bad debts expense based on an aging of accounts receivable. The aging schedule shows that $ 15,200 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $ 11,600.
2014
Apr. 1 Collected the maturity value of the Great Mart note.
Jun. 23 Sold merchandise inventory to Ambiance, Corp., receiving a 60-day, 9% note for $ 13,000. Ignore cost of goods sold.
Aug. 22 Ambiance, Corp. dishonored its note at maturity; the business converted the maturity value of the note to an account receivable.
Nov. 16 Loaned $ 21,000 cash to Creed, Inc. receiving a 90-day, 8% note.
Dec. 5 Collected in full on account from Ambiance, Corp.
31 Accrued the interest on the Creed, Inc. note.
Record the transactions in the journal of Relaxing Recliner Chairs. Explanations are not required. (For notes stated in days, use a 360-day year. Round to the nearest dollar.)



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  • CreatedJanuary 16, 2015
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