Lancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a...
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Lancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $20,000, 60 day, six percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received an $18,000, 120 day, seven percent note from B. Shore Company on account. Dec.16 Received a $14,400, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc. uses the allowance method of providing for credit losses. Recorded expected credit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Dec.31 Accounts of $24,500. An analysis of aged receivables indicates that the desired balance of the allowance account should be $21,300. Dec.31 Made the appropriate adjusting entries for interest. Required Record the foregoing transactions and adjustments in general journal form. (Round all interest income calculations to the nearest dollar.) General Journal Date Description Debit Credit Notes Receivable-R. Elliot ◆ Accounts Receivable-R. Elliot → Received a 60-day, 6 percent note on account. Cash → Interest Income + Notes Receivable-R. Elliot To record receipt of principal plus interest from R. Elliot. Notes Receivable-B. Shore Company + Accounts Receivable - B. Shore Company Received a 120-day, 7 percent note on account. Jun.8 Aug.7 Sep.1 20,000 0 20,200 0 0 18,000 0 0 20,000 0 200 20,000 0 18,000 Notes Receivable-C. Judd Accounts Receivable-C. Judd Received a 45-day, 10 percent note on account. Dec.30 Accounts Receivable - B. Shore Company Notes Receivable-B. Shore Company Notes Receivable-B. Shore Company To record dishonoring of B. Shore Company's note. Allowance for Doubtful Accounts Accounts Receivable - B. Shore Company To write off B. Shore's account. Allowance for Doubtful Accounts Accounts Receivable - B. Shore Company To record allowance for uncollectible accounts. Dec.31 Notes Receivable-C. Judd Interest Income To accrue interest income on December 16 note. Dec.16 Dec.31 Dec.31 14,400 0 0 14,400 Lancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $20,000, 60 day, six percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received an $18,000, 120 day, seven percent note from B. Shore Company on account. Dec.16 Received a $14,400, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc. uses the allowance method of providing for credit losses. Recorded expected credit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Dec.31 Accounts of $24,500. An analysis of aged receivables indicates that the desired balance of the allowance account should be $21,300. Dec.31 Made the appropriate adjusting entries for interest. Required Record the foregoing transactions and adjustments in general journal form. (Round all interest income calculations to the nearest dollar.) General Journal Date Description Debit Credit Notes Receivable-R. Elliot ◆ Accounts Receivable-R. Elliot → Received a 60-day, 6 percent note on account. Cash → Interest Income + Notes Receivable-R. Elliot To record receipt of principal plus interest from R. Elliot. Notes Receivable-B. Shore Company + Accounts Receivable - B. Shore Company Received a 120-day, 7 percent note on account. Jun.8 Aug.7 Sep.1 20,000 0 20,200 0 0 18,000 0 0 20,000 0 200 20,000 0 18,000 Notes Receivable-C. Judd Accounts Receivable-C. Judd Received a 45-day, 10 percent note on account. Dec.30 Accounts Receivable - B. Shore Company Notes Receivable-B. Shore Company Notes Receivable-B. Shore Company To record dishonoring of B. Shore Company's note. Allowance for Doubtful Accounts Accounts Receivable - B. Shore Company To write off B. Shore's account. Allowance for Doubtful Accounts Accounts Receivable - B. Shore Company To record allowance for uncollectible accounts. Dec.31 Notes Receivable-C. Judd Interest Income To accrue interest income on December 16 note. Dec.16 Dec.31 Dec.31 14,400 0 0 14,400
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Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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