Current Attempt in Progress Your answer is partially correct. Information on Novak Corp., which reports under...

Transcribed Image Text:

Current Attempt in Progress Your answer is partially correct. Information on Novak Corp., which reports under ASPE, follows: July 1 3 5 9 Dec. 29 Novak Corp. sold to Wildhorse Ltd. merchandise having a sales price of $9,300, terms 2/10, n/60. Ignore cost of goods sold entry. Wildhorse returned defective merchandise having a sales price of $700. The merchandise was not saleable and was scrapped. Accounts receivable of $18,900 are factored with Pina Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds and collections are handled by the finance company. Specific accounts receivable of $14,400 are pledged to Landon Credit Corp. as security for a loan of $10,700 at a finance charge of 2% of the loan amount plus 9% interest on the outstanding balance. Novak will continue to make the collections. All the accounts receivable pledged are past the discount period and were originally subject to a 2% discount. Wildhorse notifies Novak that it is bankrupt and will be able to pay only 10% of its account. Prepare the entry to write off the uncollectible balance using the allowance method. (a) Prepare all necessary journal entries on Novak's books. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Current Attempt in Progress Your answer is partially correct. Information on Novak Corp., which reports under ASPE, follows: July 1 3 5 9 Dec. 29 Novak Corp. sold to Wildhorse Ltd. merchandise having a sales price of $9,300, terms 2/10, n/60. Ignore cost of goods sold entry. Wildhorse returned defective merchandise having a sales price of $700. The merchandise was not saleable and was scrapped. Accounts receivable of $18,900 are factored with Pina Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds and collections are handled by the finance company. Specific accounts receivable of $14,400 are pledged to Landon Credit Corp. as security for a loan of $10,700 at a finance charge of 2% of the loan amount plus 9% interest on the outstanding balance. Novak will continue to make the collections. All the accounts receivable pledged are past the discount period and were originally subject to a 2% discount. Wildhorse notifies Novak that it is bankrupt and will be able to pay only 10% of its account. Prepare the entry to write off the uncollectible balance using the allowance method. (a) Prepare all necessary journal entries on Novak's books. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.)