Problem 9-7A On January 1, 2017, Harter Company had Accounts Receivable $130,800
ID: 2464169 • Letter: P
Question
Problem 9-7A
On January 1, 2017, Harter Company had Accounts Receivable $130,800, Notes Receivable $45,600, and Allowance for Doubtful Accounts $33,800. 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. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 5 Sold $40,200 of merchandise to Sheldon Company, terms n/15. 20 Accepted Sheldon Company’s $40,200, 3-month, 6% note for balance due. Feb. 18 Sold $30,200 of merchandise to Patwary Company and accepted Patwary’s $30,200, 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 $28,000, 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 $10,000 of merchandise to Stanbrough Company and accepted a $10,000, 6-month, 8% note for the amount due.Explanation / Answer
Date Account title and explanations Debit Credit 5-Jan Account receivable 40,200 To Sales 40,200 (Being goods sold to sheldon company) 20-Jan Note Receivable 40,200 To Account receivable 40,200 Being accepted sheldon co's Note) 18-Feb Account receivable 30,200 To Sales 30,200 (Being sold goods to patwary co.) Note Receivable 30,200 To Account receivable 30,200 (Being accepted note from patwari co.) 20-Apr Cash 40,803 To Note Receivable 40,200 To Interest received 603 (Being collected sheldon co's note) 30-Apr Cash 46,664 To Note Receivable 45,600 To Interest received 1,064 (Being received payment from willingham co.) 25-May Note Receivable 28,000 To Account receivable 28,000 (Being Potter co.'s Notes is accepted inrespect of past dues) 18-Aug Cash 31,257 To Note Receivable 30,200 To Interest received 1,057 (Being amunt received from patwari co.) 25-Aug Account Receivable 28,000 To Notes Receivable 28,000 (being Potter Inc note is dishonoured) 1-Sep Account receivable 10,000 To Sales 10,000 Note Receivable 10,000 To Account receivable 10,000
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