Problem 9-7A On January 1, 2017, Harter Company had Accounts Receivable $128,600

Question

Problem 9-7A

On January 1, 2017, Harter Company had Accounts Receivable $128,600, Notes Receivable $40,800, and Allowance for Doubtful Accounts $29,400. The note receivable is from Willingham Company. It is a 4-month, 7% note dated December 31, 2016. Harter Company prepares financial statements annually at December 31. During the year, the following selected transactions occurred.

Journalize the transactions.

Jan. 5 Sold $35,000 of merchandise to Sheldon Company, terms n/15. 20 Accepted Sheldon Company’s $35,000, 3-month, 6% note for balance due. Feb. 18 Sold $23,200 of merchandise to Patwary Company and accepted Patwary’s $23,200, 6-month, 7% note for the amount due. Apr. 20 Collected Sheldon Company note in full. 30 Received payment in full from Willingham Company on the amount due. May 25 Accepted Potter Inc.’s $19,200, 3-month, 7% note in settlement of a past-due balance on account. Aug. 18 Received payment in full from Patwary Company on note due. 25 The Potter Inc. note was dishonored. Potter Inc. is not bankrupt; future payment is anticipated. Sept. 1 Sold $11,800 of merchandise to Stanbrough Company and accepted a $11,800, 6-month, 8% note for the amount due. Date Account Titles and Explanation Debit Credit

Explanation / Answer

Date Account titles & Explanations Debit Credit 5-Jan Account receivable-sheldon 35,000 sales 35,000 20-Jan Note receivable 35,000 Account receivable-sheldon 35,000 18-Feb Note receivable-patwary 23,200 sales 23,200 20-Apr Cash 35,525 interest income (35,000*6%*3/12) 525 note receivable 35,000 30-Apr Cash 41,752 interest income (40,800*7%*4/12) 952 note receivable 40,800 25-May Note receivable 19,200 Account receivable -Potter incs 19,200 18-Aug Cash 24,012 interest income (23200*7%*6/12) 812 note receivable 23,200 25-Aug account receivable-potter incs 19,536 interest income (19200*7%*3/12) 336 note receivable 19,200 1-Sep note receivable 11,800 sales 11,800

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