The following were selected from among the transactions completed during the cur

Question

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Jan. 21. Sold merchandise on account to Black Tie Co., $28,000. The cost of merchandise sold was $16,800. Mar. 18. Accepted a 60-day, 6% note for $28,000 from Black Tie Co. on account. May 17. Received from Black Tie Co. the amount due on the note of March 18. June 15. Sold merchandise on account to Pioneer Co. for $17,700, net/30. The cost of merchandise sold was $10,600. 21. Loaned $18,000 cash to JR Stutts, receiving a 30-day, 8% note. 25. Received from Pioneer Co. the amount due on the invoice of June 15. July 21. Received the interest due from JR Stutts and a new 60-day, 9% note as a renewal of the loan of June 21. (Record both the debit and the credit to the notes receivable account.) Sept. 19. Received from JR Stutts the amount due on her note of July 21. 22. Sold merchandise on account to Wycoff Co., $20,000. The cost of merchandise sold was $12,000. Oct. 14. Accepted a 30-day, 6% note for $20,000 from Wycoff Co. on account. Nov. 13. Wycoff Co. dishonored the note dated October 14. Dec. 28. Received from Wycoff Co. the amount owed on the dishonored note, plus interest for 45 days at 8% computed on the maturity value of the note.

Explanation / Answer

Journal Entries in the book of Danix Co During the year.

Date Particulars Amount ($) Amount ($) Debit Credit Jan, 21 Black Tie & Company                                  Dr. 28,000             To Cost of Goods sold 16,800             To Gross Profit 11,200 (Being Merchandise sold on credit) Mar, 18 6% Note Receivable                                     Dr. 28,000            To Black Tie & Company 28,000 (Being Notes accepted in consideration of merchandise sells) May, 17 Bank                                                                   Dr 280           To Interest on 6% Note 280 (Being Interest received for the period Mar, 18 to may, 17 ) June, 15 Pioneer Company                                        Dr. 17,700             To Cost of Goods sold 10,600             To Gross Profit 7,100 (Being Merchandise sold on credit) June,21 Loan to JR Stutts                                             Dr. 18,000              To Cash 18,000 (being loan given) 8% Notes Receivable                                    Dr. 18,000              To Loan to JR Stutts 18,000 (Being 8% notes received in exchange of loan) June,25 Cash                                                                      Dr. 17,700             To Pioneer Company 17,700 (Being Amount received) July, 21 Notes Receivable                                           Dr. 251                To Interest on 8% Notes         118                To Interest on 9% Notes       133 (being interest due) Cash                                                                      Dr. 251               To notes receivable 251 (Being interest received) Sep, 19 Cash                                                                         Dr. 18,000              To 9% Nottes Receivable 18,000 (being amount due on Notes receivable received) Sep, 22 Wycoff Company                                               Dr. 20,000             To Cost of Goods sold 12,000             To Gross Profit 8,000 (Being Merchandise sold on credit) Oct, 14 6% Note Receivable                                     Dr. 20,000            To Wycoff Company 20,000 (Being Notes accepted in consideration of merchandise sells) Nov, 13 No Entry Dec, 28 Cash 20,197            To 6% Notes Receivable 20,000            To Interest on Dishonoured Bill 197 (being Amount received on Bill including interest for dishnour the bill for 45 Days @ 8%

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