Question

Sleepy Recliner Chairs completed the following selected transactions:
2013
Jul. 1 Sold merchandise inventory to Go Mart, receiving a $ 37,000, nine-month, 8% note. Ignore cost of goods sold.
Oct. 31 Recorded credit and debit card sales for the period of $ 19,000. (Use the gross method.)
Nov. 3 Card processor drafted company’s checking account for processing fee of $ 420.
Dec. 31 Made an adjusting entry to accrue interest on the Go Mart note.
31 Made an adjusting entry to record bad debts expense based on an aging of accounts receivable. The aging schedule shows that $ 14,100 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $ 10,200.
2014
Apr. 1 Collected the maturity value of the Go Mart note.
Jun. 23 Sold merchandise inventory to Appeal, Corp., receiving a 60- day, 12% note for $ 7,000. Ignore cost of goods sold.
Aug. 22 Appeal, Corp. dishonored its note at maturity; the business converted the maturity value of the note to an account receivable.
Nov. 16 Loaned $ 23,000 cash to Welch, Inc., receiving a 90- day, 16% note.
Dec. 5 Collected in full on account from Appeal, Corp.
31 Accrued the interest on the Welch, Inc. note.
Record the transactions in the journal of Sleepy 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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