Ditzler Company, a construction supply company, uses the allowance method of accounting for uncollectable accounts receivable. Selected transactions completed by Ditzler Company are as follows:

Feb. 1. Sold merchandise on account to Ames Co., $8,000. The cost of the merchandise sold was $4,500.

Mar. 15. Accepted a 60-day, 12% note for $8,000 from Ames Co. on account.

Apr. 9. Wrote off a $2,500 account for Dorset Co. as uncollectible.

21. Loaned $7,500 cash to Jill Klein, receiving a 90-day, 14% note.

May 14. Received the interest due from Ames Co. and a new 90-day, 14% note as a renewal of the loan. (Record both the debit and the credit to the notes receivable account.)

June13. Reinstated the account of Dorset Co., written off on April 9, and received $2,500 in full payment.

July 20. Jill Klein dishonored her note.

Aug. 12. Received from Ames Co. the amount due on its note of May 14.

19. Received from Jill Klein the amount owed on the dishonored note, plus interest for 30 days at 15%, computed on the maturity value of the note.

Dec. 16. Accepted a 60-day, 12% note for $12,000 from Global Company on account.

31. It is estimated that 3% of the credit sales of $1,375,000 for the year ended December 31 will be uncollectable.

Instructions

Journalize the transactions. Omit explanations.

Journalize the adjusting entry to record the accrued interest on December 31 on the Global Company note.

Answer rating: 100% (QA)

Feb 1 Accounts ReceivableAmes Co 800000 Sales 800000 Feb 1 Cost of Merchandise Sold 4... View the full answer